Suppose that the U.S. spot rate on the Canadian dollar is C$.93. The risk-free nominal rate in the U.S. is 5 percent while it is only 4 percent in Canada. Which one of the following three-year forward
Rates best establishes the approximate interest rate parity condition?
A) C$.8820
B) C$.9024
C) C$.9192
D) C$.9216
E) C$.9309
Correct Answer:
Verified
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