The spot rate between Canada and the U.S. is Can$1.2449/$, while the one-year forward rate is Can$1.2448/$.
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Question:
The spot rate between Canada and the U.S. is Can$1.2449/$, while the one-year forward rate is Can$1.2448/$. The risk-free rate in Canada is 4.65 percent and risk-free rate in the United States is 2.77 percent. How much in profit can you earn on $12,500 utilizing covered interest arbitrage?
Multiple Choice
$236.05
$233.95
$206.54
$188.84
$263.19
Related Book For
Statistics The Exploration & Analysis of Data
ISBN: 978-1133164135
7th edition
Authors: Roxy Peck, Jay L. Devore
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