You Are Expecting a Payment of C$100,000 Four Years from Now.The

question 97

Multiple Choice

You are expecting a payment of C$100,000 four years from now.The risk-free rate of return is 3.8 percent in the U.S.and 4.1 percent in Canada.The inflation rate is 2 percent in the U.S.and 3 percent in Canada.Suppose the current exchange rate is C$1 = $0.8273.How much will the payment four years from now be worth in U.S.dollars?

• A)$61,129
• B)$62,414
• C)$66,667
• D)$78,202
• E)$81,745

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Definitions:

Average Prices

The mean cost calculated by dividing the total sum of all prices by the number of prices in the dataset.

Supermarkets

Large retail market places typically offering a wide variety of goods including food, clothing, and household items.

P-values

An indication of the strength of the evidence against the null hypothesis, represented as a probability that measures the likelihood of the observed outcomes under the assumption that the null hypothesis is valid.

Matched Pairs

A study design where subjects are paired based on certain characteristics, and one from each pair is assigned to the treatment group and the other to the control.