Assume the Current Spot Rate Is Can$1

question 77

Multiple Choice

Assume the current spot rate is Can$1.2811 and the one-year forward rate is Can$1.2767.Also assume the nominal risk-free rate in Canada is 3.2 percent while the U.S.rate is 3.5 percent.Using covered interest arbitrage you can earn an extra profit of ________ for every $1 invested over the next year.

• A)$.0018
• B)$.0015
• C)$.0011
• D)$.0006
• E)$.0002

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Definitions:

Synapse

The space between neurons where communication takes place through neurotransmitters.

Inhibitory Signals

neural or chemical messages that decrease the likelihood of a neuron firing, thus reducing or preventing an action or response.

Integration Phase

The integration phase is a stage in various processes (psychological therapy, project development) where different elements or experiences are combined and fully assimilated.

Presynaptic Neuron

The neuron that sends a signal across the synaptic gap to another neuron during neurotransmission.