The nominal interest rate in the U. S. is 5% and the nominal interest rate in Canada is 3%. The spot value of the U. S. dollar is 1 ($/Canadian dollar) and the forward rate is 1.2 ($/Canadian dollar). Which of the following is not true?A. The interest parity condition does not hold.
B. The dollar is likely to appreciate in spot markets.
C. Money will flow into the Canada.
D. The dollar is trading at a forward discount.
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The nominal interest rate in the U. S. is 5% and the nominal interest rate in Canada is 3%. The spot...
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