Sppose the following data6 month interest rate in canada , Ask an Expert

Finance

Suppose the following data:

6 month interest rate in Canada = 2.93833%

6 month interest rate in US = 2.46375%

spot exchange rate = 1.11976

a) According to covered interest rate parity, what must be the 6-month forward rate?

b) If the actual forward rate is 1.1575 then what actions will bring the forward and spot rates back into line with interest rate parity?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92682083

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