A risk-free asset in the U.S.is currently yielding 3 percent while a Canadian risk-free asset is yielding 2 percent.The current spot rate is C$.72 is equal to $1.What is the approximate two-year forward rate if interest rate parity holds?
A) C$.7057
B) C$.7128
C) C$.7136
D) C$.7189
E) C$.7272
Correct Answer:
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