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%
E) None of the options
Correct Answer:
Verified
Correct Answer:
Verified
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