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Suppose the (1-year) interest rate on bank deposits is 2% in Canada and 1.5% in United States. If the (1-year) forward US$–C$ exchange rate is C$1.5 per US$ and the spot rate is C$1.2 per US$, what is the expected US$–C$ exchange rate one year ahead?

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Financial Management, Finance

Category:- Financial Management
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