Suppose That the Spot Rate on the Canadian Dollar Is

question 15

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

---

Definitions:

Human Resource Management

The strategic approach to the effective management of people in an organization, focusing on policies and systems to maximize employee performance.

New Products

Goods or services that have been recently developed or introduced to the market, offering new features, benefits, or innovations.

Long-term Development

A strategic approach focusing on achieving sustained growth and progression over an extended period, considering future implications of current decisions.

Rigid Structure

An organizational framework characterized by strict rules, procedures, and hierarchies that leave little flexibility for employees or adaptation.