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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Definitions:

Fixed-Ratio

A schedule of reinforcement where a response is reinforced only after a specified number of responses have occurred.

Variable-Interval

In the context of operant conditioning, a schedule of reinforcement where a response is rewarded after an unpredictable amount of time has passed.

Instrumental Learning

A type of learning where a behavior is strengthened or weakened, depending on the behavior's consequences, also known as operant conditioning.

Associative Learning

Learning that occurs when a connection is made between two stimuli, or between a stimulus and a response.