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If the Spot Rate Is 1

Question 1

Multiple Choice

If the spot rate is 1.67CAN$/US$ and the 1-month forward rate is 1.70CAN$/US$:


A) the Canadian dollar is selling at a premium.
B) the Canadian dollar is selling at a discount.
C) the U.S. dollar is selling at a discount.
D) the U.S. dollar is selling at par.
E) none of the above

Correct Answer:

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