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:

Galvanic Skin Response

A method of measuring the electrical conductance of the skin, which varies with its moisture level, often used as an indicator of emotional arousal.

Dilation of the Pupils

The expansion or widening of the pupils, which can occur in response to various factors such as changes in light, emotional states, or the effect of certain drugs.

Cognitive Component

Pertains to the beliefs, thoughts, and knowledge about an object, person, situation, or concept that are part of an attitude.

Physiological Component

Aspects of bodily functions and processes that contribute to physical health or activity.