The spot rate on the Canadian dollar is 1.23. Interest rates in Canada are expected to average 4.2 percent while they are anticipated to be 3.3 percent in the U.S. What is the expected exchange rate three years from now?
A) C$1.2760
B) C$1.2635
C) C$1.2483
D) C$1.2108
E) C$1.1971
Correct Answer:
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