Assume the spot rate on the Canadian dollar is C$1.1847.The risk-free nominal rate in the U.S.is 5 percent while it is only 4 percent in Canada.What one-year forward rate will create interest rate parity?
A) C$1.1362
B) C$1.1429
C) C$1.1734
D) C$1.1799
E) C$1.1961
Correct Answer:
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