Question: You are borrowing USD 1000 for one year, at a coupon rate of 6.9%. You will get the money today, and will repay all

You are borrowing USD 1000 for one year, at a coupon rate of 6.9%. You will get the money today, and will repay all principal and interest one year from today. If the current CAD per USD spot rate is 0.96, the CAD inflation rate is 1.6%, and the USD inflation rate is 2.6%, what is the CAD cost of debt for this loan?

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