A multinational firm can borrow 5 million Canadian dollars from a Canadian bank at 9 percent for one year and the same in U.S. dollars at a Detroit bank at 8 percent. With a current C$/$ exchange rate of $1.345, what one-year forward contract rate would make the borrower indifferent between the two loans?

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The Answer of A multinational firm can borrow 5 million Canadian dollars from a Canadian bank at 9 percent for one year and the same in U.S. dollars at a Detroit bank at 8 percent. With a current C$/$ exchange rate of $1.345, what one-year forward contract rate would make the borrower indifferent between the two loans?

A Multinational Firm Can Borrow 5 Million Canadian Dollars from a Canadian