Suppose the spot rate for the Canadian dollar is CAD1.034 = USD1,the 3-month forward rate is CAD1.036 = USD1,and the 1-year forward rate is CADS1.039.= USD1.If no other information is available,what will be your guess about the spot rate in 1 year?
A) 1.034
B) 1.036
C) 1.039
D) 1.037
Correct Answer:
Verified
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