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Question 1: Using covered interest parity, calculate the 3 month CAD/USD forward rate if the spot CAD/USD rate is 1.1239 and the three month interest rates on CAD and USD are 0.75% and 0.4% annually respectively. This answer is 1.12488.
A Previous question had said Fx with lower interest rate trades forward Premium. The CAd here has the higher int rate but seems forward seems to be prem. Can someone explain.
Is it this is really the usd trading forward prem and not CAD
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