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Canadians nominal 90-day interest rate


Problem:

Suppose the nominal interest rate in the US is 7.5% and US inflation is 3.5%. Also the Canadian dollar spot rate is 0.8574 and the Japanese yen spot rate is 0.00688. Finally, the 90-day forward rate for the Canadian dollar is 0.8493 and for the Japanese yen is 0.00700.

Suppose the nominal 90 day US interest rate is 1.875%. Then Canadians nominal 90-day interest rate is approximately:

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Finance Basics: Canadians nominal 90-day interest rate
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