The interest rate on a 1-year Canadian security is 2%. The current exchange rate is C$ =

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The interest rate on a 1-year Canadian security is 2%. The current exchange rate is C$ = US $0.73. The 1-year forward rate is C$ = US $0.70.

What is the return (denominated in U.S. $) that a U.S. investor can earn by investing in the Canadian security?

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International Economics

ISBN: 9781319218508

5th Edition

Authors: Robert C. Feenstra, Alan M. Taylor

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Posted Date: Jun 17, 2023 01:20 AM

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The interest rate on a 1-year Canadian security is 2%. The current exchange rate is C$ =

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Lets assume the US investor invests 1 US dollar in the Canadian ... View the full answer

International Economics

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