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David Estimated a Six-Month Forward Rate of C$1

Question 40

Multiple Choice

David estimated a six-month forward rate of C$1.01 per US$.The six-month US$ interest rate is currently 4%.If David's estimate is based on Interest Rate Parity, what was the observed current six-month Canadian interest rate, if the spot rate is C$1.02 per US$?


A) 5.03%
B) 2.03%
C) 2.98%
D) 2.05%

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