Suppose the spot rate on the Canadian dollar is C$1.023.The risk-free nominal rate in the U.S.is 2.6 percent while it is 3.25 percent in Canada.Which one of the following 1-year forward rates best establishes the approximate interest rate parity condition?
A) C$1.0296
B) C$1.0164
C) C$1.0552
D) C$1.0867
E) C$1.0923
Correct Answer:
Verified
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