Suppose the 1-Year Risk-Free Rate of Return in Canada

question 10

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%

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Sample Size

The number of observations or data points that constitute a sample drawn from a population.

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A measure of the distribution of data points around the mean, indicating how spread out the data points are.

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