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Implied exchange rate between the two currencies

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Smith will need 1000 U.S. dollars one year from now.He caninvest fund in a U.S. dollar accoun for the next yeaar at 9%.Alternatively Smith can now buy Canadian dollars at the exchangerate of 0.73 U.S. =1 CDN, and invest in a Canadian dollar accountfor the next year at 10%. If both of these alternaatives reqquire the same amount of currency today, what is the implied exchange rate between the two currencies one year from now?

Reference no: EM131206193

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