Calculate the Forward Exchange Rate Using the Following Information

question 91

Multiple Choice

Calculate the forward exchange rate using the following information.spot exchange rate is $1.45 for 1 Euro.The nominal interest rate in Canada is 6 percent and the nominal interest rate in Europe is 4%.

• A)1.44
• B)1.43
• C)1.45
• D)1.41
• E)1.42

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Definitions:

Number of Successes

In statistical experiments, the count of instances that meet a defined criterion for success.

Standard Error

A measure of the variability or dispersion of a sampling distribution, often used as an estimate of the accuracy of a sample mean.

Plus Four Method

A statistical method that adds four to the sample size and regards two successes and two failures in a binomial proportion confidence interval.

P-value

The probability of obtaining a test statistic at least as extreme as the one observed, assuming the null hypothesis is true; used to determine statistical significance.