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What is the one year forward premium discount of the cad

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Question - Suppose you observe the one-year interest rates in the US and Canada are 5% and 13%, respectively. the current spot rate is $0.71/CAD and the one year- forward rate is $0.61/CAD. You have a $1,000,000 line of credit in the US and a CAD 1,500,000 line of credit in Canada. 

Required - What is the one year forward premium discount of the CAD? Express your answers as a percentage.

Reference no: EM132984486

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