1. Assume the current spot rate is CAD1.2490 and the 1-year forward rate is CAD1.2445. The nominal risk-free rate in Canada is 2.22 percent while it is 1.84 percent in the U.S. Using covered interest arbitrage you can earn an extra _____ profit over that which you would earn if you invested $1000 in the U.S. for one year.

		$6.90
		$7.10
		$7.30
		$7.50
		$7.70

2. Stephanie G. has just returned from a long trip to Europe. She started the trip with $6,000 in her pocket. She spent 2,370 traveling throughout euroland, 5,390NKr in Norway, and 1254 in the U.K. The exchange rates were $1 = .8397, 1NKr = $.1173, and 1 = $1.3878. How many dollars did she have left by the time she returned to the U.S.?