You Are Expecting a Payment of C$100,000 Four Years from Now.The

question 97

Multiple Choice

You are expecting a payment of C$100,000 four years from now.The risk-free rate of return is 3.8 percent in the U.S.and 4.1 percent in Canada.The inflation rate is 2 percent in the U.S.and 3 percent in Canada.Suppose the current exchange rate is C$1 = $0.8273.How much will the payment four years from now be worth in U.S.dollars?

• A)$61,129
• B)$62,414
• C)$66,667
• D)$78,202
• E)$81,745

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