The inflation rates in the U.S. and Canada are predicted to be 3 and 5%, respectively, in the coming year. The exchange rate is currently 1.323 Canadian dollars for 1 U.S. dollars. Assuming appropriate equilibrium adjustments take place, how many U.S. dollars will it take to buy 1 Canadian dollar at the end of the year? What will it cost to buy a U.S. dollar?

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1 YearForward CS Spot C1Inflation Rate ... View the full answer