If the Rate of Return Is 3 Percent in Mexico

Multiple Choice

If the rate of return is 3 percent in Mexico and 1 percent in Canada, the

A) law of one price predicts a single international rate of return between 3 percent and 1 percent.
B) Mexican peso is expected to depreciate against the Canadian dollar by 2 percent.
C) Mexican peso is expected to appreciate against the Canadian dollar by 2 percent.
D) rate of return in Mexico is expected to fall to 1 percent.
E) rate of return in Canada is expected to rise to 3 percent.