If the Canadian Dollar Becomes Stronger in Relation to the Japanese

question 59

Multiple Choice

If the Canadian dollar becomes stronger in relation to the Japanese yen

• A) the prices of all Canadian-made products would rise in Japan and the prices of all Japanese-made products would fall in Canada.
• B) there would be no effect on the prices of Canadian-made products sold in Japan.
• C) the prices of all Canadian-made products would fall in Japan and the prices of all Japanese-made products would rise in Canada.
• D) the prices of all Canadian-made products would fall in Japan and the prices of all Japanese-made products would fall in Canada.
• E) the prices of all Canadian-made products would rise in Japan and the prices of all Japanese-made products would rise in Canada.

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Definitions:

Standard Deviation

A numerical index representing the variation or spread in a collection of data points or financial returns.

Sharpe Ratio

A measure used to evaluate the risk-adjusted return of an investment portfolio, calculated by subtracting the risk-free rate of return from the portfolio's return and dividing by the portfolio's standard deviation of returns.

Risk-free Rate

The theoretical rate of return of an investment with zero risk, often represented by Treasury bills.

Borrowing Rate

The interest rate or cost that a borrower pays to secure funds from a lender.