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The Present Exchange Rate Is C$ = U

Question 14

Multiple Choice

The present exchange rate is C$ = U.S.$0.78.The 1-year future rate is C$ = U.S.$0.75.The yield on a 1-year U.S.bill is 5%.A yield of __________ on a 1-year Canadian bill will make investor indifferent between investing in the U.S.bill and the Canadian bill.


A) 9.2%
B) 8.3%
C) 6.4%
D) 11.3%

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