Assume Canada Is a Small Open Economy with Perfect Capital

question 13

Multiple Choice

Assume Canada is a small open economy with perfect capital mobility.If the interest rate is 8 percent in Canada and 6 percent in China,and if the exchange rate is stable at 6 Chinese yuan for one Canadian dollar,what would happen?

• A) Canadian investors want to invest in China,and Chinese investors want to invest in Canada.
• B) Both Canadian and Chinese investors want to invest in Canada.
• C) Canadian investors want to invest in Canada,and Chinese investors want to invest in China.
• D) Both Canadian and Chinese investors want to invest in China.

Understand the concepts and calculations behind risk-adjusted performance measures.

Differentiate between Sharpe, Treynor, and Jensen's performance measures and understand their applications.

Calculate the dollar-weighted and time-weighted returns on investments.

Understand the concept of the comparison universe in mutual fund evaluation.

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Definitions:

Supply

The total amount of a good or service available for purchase at any given price level in a given market.

Price

The amount of money required to purchase a good or service, determined by factors such as supply and demand, production costs, and market competition.

Coal Miners

Individuals and companies engaged in the extraction of coal from the earth.

Environmental Laws

Regulations and standards aimed at preserving and protecting the environment from harmful practices or pollutants, promoting sustainability.