Suppose that the spot rate on the U.S. dollar is C$.91. The risk-free nominal rate in the U.S. is 8 percent while it is only 4 percent in Canada. Which one of the following one-year forward rates best
Establishes the approximate interest rate parity condition?
A) C$.8678
B) C$.8736
C) C$.8855
D) C$.9056
E) C$.9212
Correct Answer:
Verified
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