Canadian Investments with a One-Year Maturity Can Be Made for 6

question 84

Multiple Choice

Canadian investments with a one-year maturity can be made for 6% and Swiss one-year investments can be made for 3%.If the spot exchange rate is Sf1.6/$, which of the following one-year forward exchange rates would convince you to invest in Switzerland?

• A)Sf1.55/$
• B)Sf1.60/$
• C)Sf1.65/$
• D)Sf1.70/$

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Definitions:

Obsessions

Recurrent and persistent thoughts, impulses, or images that are intrusive and cause significant anxiety or distress.

Neutralizing

Attempting to eliminate thoughts that one finds unacceptable by thinking or behaving in ways that make up for those thoughts and so put matters right internally.

Cognitive-Behavioral Perspective

A psychological approach that emphasizes the role of thought processes and behaviors in understanding and treating mental disorders.

Neutralizing

A psychological mechanism that attempts to counteract or nullify uncomfortable or distressing thoughts and emotions.