If the Nominal Exchange Rate Between the Canadian Dollar and the American

question 18

Multiple Choice

If the nominal exchange rate between the Canadian dollar and the American dollar is 0.89 Canadian dollars per American dollar, how many American dollars are required to buy a product that costs 2.5 Canadian dollars?

• A)$1.32
• B)$2.23
• C)2.5
• D)$2.75
• E)$2.81

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Definitions:

Treasury Stock

Shares that were issued and later reacquired by the issuing company.

Par Common Stock

The nominal or face value of common stock as stated in the corporate charter, which is the minimum amount that must be paid by investors for each share.

Preferred Stock

A type of stock that provides dividends before common stockholders and has priority over common stock in the event of liquidation.

Par Value

A nominal value assigned to a share of stock in the charter of the corporation, often used to determine legal capital.