Suppose Canadian interest rates are presently 4.5 percent on one-year Canadian T-bills.Suppose that the U.S.dollar is quoted at US$1 = C$1.0695 and that the interest rate on one-year T-bills in the U.S.is 4.9 percent.What should the one-year forward exchange rate (C$/US$) be?
A) 1.0783
B) 1.0736
C) 1.0692
D) 1.0654
Correct Answer:
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