Assume the Current Spot Rate Is Can

question 30

Multiple Choice

Assume the current spot rate is Can$.9892 and the 1-year forward rate is Can$.9901.The nominal risk-free rate in Canada is 3.8 percent while it is 3.9 percent in the U.S.If you use covered interest arbitrage,how much extra profit can you earn over that which you would earn if you invested $100 in the U.S.for one year?

• A)$)16
• B)−$.02
• C)$)23
• D)−$.19
• E)$)04

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Definitions:

Membrane Potential

The voltage across a cell's plasma membrane, representing a difference in electrical charge inside and outside the cell.

Afterpotential

The transient change in membrane potential that occurs following a nerve impulse, affecting neuron excitability.

Depolarization

The process by which a cell's membrane potential becomes less negative, leading to an action potential in nerve and muscle cells.

Repolarization

The process by which a cell's membrane returns to its resting potential after depolarization.