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

question 32

Multiple Choice

Suppose the 1-year risk-free rate of return in Canada.is 4.5% and the 1-year risk-free rate of return in Britain is 7.7%.The current exchange rate is 1 pound = Cad.$1.60.A 1-year future exchange rate of __________ for the pound would make a Canadian investor indifferent between investing in the Canadian security and investing in the British security.

• A)1.5525
• B)2.0411
• C)1.7500
• D)2.3369

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Definitions:

Piggybacking

The process of connecting to a wireless network without the permission of the owner of the network.

Hijacking

In the context of computing, it refers to the unauthorized taking over of a digital device or network communication, often for malicious purposes.

Spamming

The practice of sending unsolicited messages, especially advertising messages, in large quantities to an indiscriminate set of recipients.

Electrical Interference

Unwanted disturbances generated by electrical sources, affecting the performance of electronic equipment or devices.