Suppose That the Spot Rate on the Canadian Dollar Is

question 1

Multiple Choice

Suppose that the spot rate on the Canadian dollar is C$1.40.The risk-free nominal rate in the U.S.is 8 percent while it is only 4 percent in Canada.Which one of the following one-year forward rates best establishes the approximate interest rate parity condition?

• A)C$1.278
• B)C$1.344
• C)C$1.355
• D)C$1.456
• E)C$1.512

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Landrum-Griffin Act

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