Suppose That the U

question 59

Multiple Choice

Suppose that the U.S. spot rate on the Canadian dollar is C$.93. The risk-free nominal rate in the U.S. is 5 percent while it is only 4 percent in Canada. Which one of the following three-year forward
Rates best establishes the approximate interest rate parity condition?

• A) C$.8820
• B) C$.9024
• C) C$.9192
• D) C$.9216
• E) C$.9309

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Definitions:

Cognitive Dissonance Theory

A theory suggesting that individuals experience psychological discomfort (dissonance) when holding two or more contradictory beliefs, ideas, or values.

Role-Playing Theory

The concept that individuals learn and understand roles by acting them out, which can influence their behavior and perceptions in various social contexts.

Attribution Theory

A psychological theory focused on how individuals interpret events and how this relates to their thinking and behavior.

Attitude Theory

A field of study within social psychology that examines how beliefs, feelings, and behaviors towards objects or concepts are organized and how they influence actions.