What must be one-year forward exchange rate

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If interest parity holds and the interest rate in Canada. is 5.5 percent, the interest rate in the US is 4 percent, the spot exchange rate is .88 U.S. dollars per Canadian dollar, what must be the one-year forward exchange rate?

Is the U.S. dollar expected to appreciate or depreciate against the Canadian dollar?

Reference no: EM131552855

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