1. The interest rate on a 1-year Canadian bond is 4.5%. The current exchange rate is C $1= US $0.75. The 1-year forward rate is C $1= US $0.80. The return (denominated in %. US$) that a U.S. investor can earn by investing in the Canadian security is A) 11.4 B) 11.5 C) 11.6 D) 11.7

1. The interest rate on a 1-year Canadian bond is 4.5%. The current exchange rate is C $1= US $0.75. The 1-year forward rate is C $1= US $0.80. The return (denominated in %. US$) that a U.S. investor can earn by investing in the Canadian security is A) 11.4 B) 11.5 C) 11.6 D) 11.7

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

1. The interest rate on a 1-year Canadian bond is 4.5%. The current exchange rate is C
$1= US $0.75. The 1-year forward rate is C $1= US $0.80. The return (denominated in
US$) that a U.S. investor can earn by investing in the Canadian security is
A) 11.4
%.
B) 11.5
C) 11.6
D) 11.7

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A 141. Subject:- finance
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