A U.S. bank treasurer issues a 1-year, $1 million U.S. CD at 5 percent annual interest to finance a C $1.50 million investment in 2-year fixed-rate Canadian bonds selling at par and paying 7 percent annually. The treasurer has utilized the funds to provide Consumer Loans in US currency and Sovereign Loans in Mexico. The treasurer expects liquidate CD position in 1 year upon maturity of the CD. Spot exchange rates are U.S. $0.78 per Canadian dollar. The treasurer is exposed to

a.

Interest rate risk

b.

Foreign exchange risk

c.

Credit risk

d.

Sovereign risk

e.

All of the above