Look at Table 24.1 and assume a 12month U.S. dollar forward rate of $0.9225 Exchange Rate C$* Country Currency U$ Europe 1.376 Eurozone countries Euro

Look at Table 24.1 and assume a 12·month U.S. dollar forward rate of $0.9225

a. Is the U.S. dollar at a forward discount or a premium on the Canadian dollar?
b. What is the annualized percentage discount or premium?
c. If you have no other information about the two currencies, what is your best guess about the spot rate in one year?
d. Suppose that you expect to receive 100,000 U.S. dollars in 1 year. How many Canadian dollars is this likely to be worth?

Exchange Rate C$* Country Currency U$ Europe 1.376" Eurozone countries Euro (EUR or ) 1.507 Sweden Krona (SEK) 6.485 5.922 Switzerland Franc (CHF) .888 .811 Pound (GBP or ) 1.668" United Kingdom 1.826 Americas Real (BRL) Brazil 2.188 2.396 Dollar (CAD) Canada 1.095 1.000 Mexico New peso (MXN) 12.083 13.231 Asia/Africa Australia Dollar (AUD) 107. 1.11 China Yuan (CNY) 6.067 5.541 Dollar (HKD) China (Hong Kong) 7.082 7.755 India Rupee (INR) 2.180 1.991 Yen (JPY or v) Japan 93.461 102.340 Rand (ZAR) South Africa 10.872 9.929 Won (KRW) South Korea 1,065.500 973.059