CAD/USD is quoted 1.2237. IF USD interest rate is 3%, CAD interest rate 4%, what is CAD/USD one year forward? And CAD/USD 3M forward?© BrainMass Inc. brainmass.com February 24, 2021, 2:33 pm ad1c9bdddf
Since the interest rates in U.S. market are lower than Canada market. The money will flow from U.S. to Canada for investment. Therefore, to have interest rate parity, the CAD ...
A discussion of the forward exchange rates ensues. The details are provided in the solution.