Suppose in the spot market 1 U.S.dollar equals 1.3750 Canadian dollars.6-month Canadian securities have an annualized return of 6.00% (and thus a 6-month periodic return of 3.00%).6-month U.S.securities have an annualized return of 6.50% and a periodic return of 3.25%.If interest rate parity holds,what is the U.S.dollar-Canadian dollar exchange rate in the 180-day forward market? In other words,how many Canadian dollars are required to purchase one U.S.dollar in the 180-day forward market? Do not round the intermediate calculations and round the final answer to four decimal places.

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? 11ea856c_8b0a_e342_9aec_81dd70789a76_TB1222_00 Note that the spot rate is in terms of C$/$.However,the formula below needs the spot rate in terms of $/C$,so we need to use the inverse of this spot rate in the formula below. 11ea856c_8b0a_e343_9aec_dbe0746ae545_TB1222_00 ? 11ea856c_8b0b_0a54_9aec_89364d3761fc_TB1222_00 ? 11ea856c_8b0b_0a55_9aec_3b1481b89e9f_TB1222_00 ? 11ea856c_8b0b_0a56_9aec_4ddd08c1de29_TB1222_00 ?
Note that the forward exchange rate gives the number of U.S dollars for 1 Canadian dollar,but the problem asks for the number of Canadian dollars per U.S.dollar.So,we need the inverse of the number above.
? 11ea856c_8b0b_3167_9aec_3d7f69dba7c2_TB1222_00

Suppose in the Spot Market 1 U