If There Is a 4% One-Year Forward Premium on the US

Multiple Choice

If there is a 4% one-year forward premium on the US dollar relative to the Canadian dollar,this implies

A) Canadian interest rates on one year accounts are approximately 4 percentage points above US rates
B) The US dollar is expected to be worth C$1.04 in one year from now
C) Short term interest rates are about 4% lower in the US than one-year rates
D) US bonds are roughly 4% riskier than Canadian bonds
E) The US dollar is expected to depreciate by 4% over the next 12 months