Question Details

By what percentage will the Canadian dollar have to depreciate to make its effective yield 



1. Effective Yield. Repeat question 9, but this time assume that Rollins, Inc., expects the 180-day forward rate of the pound to substantially underestimate the spot rate to be realized in 180 days.

2. Effective Yield. Assume that the one-year U.S. interest rate is 10% and the one-year Canadian
interest rate is 13%. If a U.S. firm invests its funds in Canada, by what percentage will the Canadian dollar have to depreciate to make its effective yield the same as the U.S. interest rate
from the U.S. firm- perspective?



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