If the annual nominal interest rate on 5-year U.S. Government Treasury bonds is 7%, and the annual nominal interest rate on 5-year Canadian bonds is 5.5%, what is the expected future spot rate in 5 years given that the current spot exchange rate between U.S. dollars and Canadian dollars is $0.587?

Question

Quizplus · Accepted Answer

The Answer of If the annual nominal interest rate on 5-year U.S. Government Treasury bonds is 7%, and the annual nominal interest rate on 5-year Canadian bonds is 5.5%, what is the expected future spot rate in 5 years given that the current spot exchange rate between U.S. dollars and Canadian dollars is $0.587?

If the Annual Nominal Interest Rate on 5-Year U