Assume That the Forward Rate Is Used to Forecast the Spot

question 29

Multiple Choice

Assume that the forward rate is used to forecast the spot rate. The forward rate of the Canadian dollar contains a 6 percent discount. Today's spot rate of the Canadian dollar is $.80. The spot rate forecasted for one year ahead is:

• A)$.860.
• B)$.848.
• C)$.740.
• D)$.752.

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Definitions:

Budgeting Formulas

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