What is the u.s. dollar-canadian dollar exchange rate

Assignment Help Finance Basics

Reference no: EM13293736

Suppose in the spot market 1 U.S. dollar equals 1.60 Canadian dollars. 6-month Canadian securities have an annualized return of 6% (and thus a 6-month periodic return of 3%). 6-month U.S. securities have an annualized return of 6.5% and a periodic return of 3.25%. If interest rate parity holds, what is the U.S. dollar-Canadian dollar exchange rate in the 180-day forward market?

Answer

1 U.S. dollar = 0.6235 Canadian dollars
1 U.S. dollar = 0.6265 Canadian dollars
1 U.S. dollar = 1.0000 Canadian dollars
1 U.S. dollar = 1.5961 Canadian dollars
1 U.S. dollar = 1.6039 Canadian dollars

Reference no: EM13293736

Questions Cloud

Find the magnitude of the magnetic force that acts on wire : The x, y, and z components of a magnetic field are Bx = 0.14 T, By = 0.17 T, and Bz = 0.17 T. What is the magnitude of the magnetic force that acts on this wire

Determine for copper at 20 degree c the resistance : The resistivity of copper is 1.724 micro-ohm-cm at200C. Determine for copper at 200C the resistance (a) of a cylindrical conductor 1 meter long and having a diameter of 1mm; (b) a rod 2 meters long and having a diameter of 2mm.

Define naoh aq is rapidly mixed with an equal volume : In an experiment, 0.500 L of 0.020 mol L ^-1 NaOH(aq) is rapidly mixed with an equal volume of 0.020 mol L^-1 HCN(aq). Calculate the time, in seconds, required for this [OH] to decrease to 1.0×10^4 mol L^-1. (Hint: Start from the rate law in the f..

Determine how much energy is stored in the capacitor : A parallel plate capacitor has square plates with sides of length 14 cm. The distance between the plates is 2 mm. How much energy is stored in the capacitor now

What is the u.s. dollar-canadian dollar exchange rate : If interest rate parity holds, what is the U.S. dollar-Canadian dollar exchange rate in the 180-day forward market?

Find the rotational frequency of the wheel : A car is moving at 9 m/s along a curve on a horizontal plane with radius of curvature 46 m. The acceleration of gravity is 9.8. Find the rotational frequency of the wheel

Find resistance of copper conductor of equal cross section : In a toaster the heating unit is a Nichrome wire whose resistance is 660 micro-ohm-CM/ft and resistance is 20 ohms.Determine the resistance of copper conductor of equalcross-section, but 10 times as long as the Nichrome wire.

Find the reduction in emec of the frisbee-earth system : A 75 g Frisbee is thrown from a point 1.2 m above the ground with a speed of 14 m/s. find the reduction in Emec of the Frisbee-Earth system

Find distance such that the block''s speed : Please explain in detail and step by step a 1.0kg block is held at rest against a spring with a force constant k = 740N/m. Find d such that the block's speed after crossing the rough patch is 2.4m/s

User Account

All Pages