You Are Expecting a Payment of C$60,000 Three Years from Now

question 122

Multiple Choice

You are expecting a payment of C$60,000 three years from now. The risk-free rate of return is 4.3 % in the U.S. and 4.8 % in Canada. The inflation rate is 3.7 % in the U.S. and 4.1 % in Canada. Suppose the current exchange rate is C$1 = $.9489. How much will the payment three years from now be worth in U.S. dollars?

• A) $28,887
• B) $30,132
• C) $52,603
• D) $56,088
• E) $70,516

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Definitions:

Placebo Effect

A beneficial effect produced by a placebo drug or treatment, which cannot be attributed to the properties of the placebo itself, and must therefore be due to the patient's belief in that treatment.

Halo Effect

A cognitive bias where the perception of one positive trait (like attractiveness) in a person influences the observer's judgment to also perceive other unrelated positive traits.

Placebo Control Group

A group in experimental research that receives a sham or inert treatment, used to compare against the real treatment's effects.

Active Component

The element in a system or product that is responsible for its primary function or effect.