14-79 If in One Year There Is No Change to Either

question 86

Multiple Choice

14-79 If in one year there is no change to either interest rates or exchange rates,what is the end-of-year profit or loss for the bank? (Hint: Annual interest is paid on both the Canadian bonds and the CD on the date of liquidation in exactly one year.)

• A)Profit of US$ 20,000.
• B)Loss of C$ 224,000.
• C)Profit of US$ 50,000.
• D)Profit of C$ 63,700.
• E)Profit of US$313,000.

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