Question
You observe that the current USD/CAD spot rate is $0.89/CAD and the USD/CAD one year forward rate today is $0.91/CAD. You can invest in the
You observe that the current USD/CAD spot rate is $0.89/CAD and the USD/CAD one year forward rate today is $0.91/CAD. You can invest in the US at 6.5% per annum or in Canada at 4.5% per annum. What is the effective dollar interest rate from investing in the US for one year?
You observe that the current USD/CAD spot rate is $0.88/CAD and the USD/CAD one year forward rate today is $0.85/CAD. You can invest in the US at 9.2% per annum or in Canada at 7% per annum. What is the effective dollar interest rate from investing in Canada for one year? Submit your final answer as a percentage rounded to two decimal places (Ex. 0.00%).
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