The Present Exchange Rate Is C$ = U

question 42

Multiple Choice

The present exchange rate is C$ = U.S. $0.78. The 1-year future rate is C$ = U.S. $0.76. The yield on a 1-year U.S. bill is 4%. A yield of __________ on a 1-year Canadian bill will make an investor indifferent between investing in the U.S. bill and the Canadian bill.

• A) 2.4%
• B) 1.3%
• C) 6.4%
• D) 6.7%
• E) None of the options are correct.

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Definitions:

RICO Act

The Racketeer Influenced and Corrupt Organizations Act, a U.S. federal law designed to combat organized crime by allowing prosecution of all individuals involved in a corrupt organization.

Arson

The willful or malicious act of causing the burning of another’s property.

Aggravated Burglary

In criminal law, gaining unlawful entry to an occupied building by using a deadly weapon, inflicting actual harm, attempting to harm, or threatening to harm, with the intent to commit a crime.

Forced Entry

The act of entering property without permission, typically using violence or force.