Multiple Choice
Suppose the 1-year risk-free rate of return in Canada.is 6%.The current exchange rate is 1 pound = Cad $1.62.The 1-year forward rate is 1 pound = $1.53.What is the minimum yield on a 1-year risk-free security in Britain that would induce a Canadian investor to invest in the British security?
A) 15.44%
B) 13.50%
C) 12.24%
D) 7.62%
Correct Answer:
Verified
Correct Answer:
Verified
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