You Are Expecting a Payment of Can$138,000 Two Years from Now.Assume

question 5

Multiple Choice

You are expecting a payment of Can$138,000 two years from now.Assume the risk-free rate of return is 2.7 percent in Canada and 3.1 percent in the U.S.Also assume the current exchange rate is Can$1.2903 = $1.Approximately how much will the payment two years from now be worth in U.S.dollars?

• A)$108,319
• B)$106,101
• C)$107,813
• D)$107,381
• E)$108,169

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Definitions:

Balance Of Trade Surplus

Occurs when a country's exports exceed its imports during a given time period, indicating a positive balance of trade.

Swiss Francs

The currency of Switzerland, used as a medium of exchange within the country.

Appreciated

A rise in the value of an asset or currency.

Dollar

A unit of currency used in the United States and other countries, known for being a standard medium of exchange.