The Yield on a 1-Year Bill in the U

Multiple Choice

The yield on a 1-year bill in the U.K.is 8%, and the present exchange rate is 1 pound = Cad.$1.60.If you expect the exchange rate to be 1 pound = Cadf.$1.50 a year from now, the return a Canadian investor can expect to earn by investing in U.K.bills is

A) -6.7%.
B) 0%.
C) 8%.
D) 1.25%.