Suppose that the risk-free rates in the United States and in Canada are 3% and 5%, respectively.The spot exchange rate between the dollar and the Canadian dollar (C$) is $0.80/C$.What should the futures price of the C$ for a one-year contract be to prevent arbitrage opportunities, ignoring transactions costs.
A)$1.00/C$
B)$1.70/C$
C)$0.88/C$
D)$0.78/C$

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The Answer of Suppose that the risk-free rates in the United States and in Canada are 3% and 5%, respectively.The spot exchange rate between the dollar and the Canadian dollar (C$) is $0.80/C$.What should the futures price of the C$ for a one-year contract be to prevent arbitrage opportunities, ignoring transactions costs.
A)$1.00/C$
B)$1.70/C$
C)$0.88/C$
D)$0.78/C$

Suppose That the Risk-Free Rates in the United States and in Canada