A U.S. investor is considering purchasing $1 million worth of Canadian stock. The dividend yieldis 3% per annum, and the expected percentage change in the Canadian dollar price of the stock is6% per annum. Expected appreciation of the Canadian dollar is +1% per annum. U.S. interest ratesare % per annum, while Canadian interest rates are 1% per annum. Local-currency stock returnshave an annualized standard deviation of 20%. $/C$ exchange rate percentage changes have anannualized standard deviation of 8%. The correlation between exchange rate and local-currencystock returns is .2. b) How risky is the investment? c) What approximately is the risk and expected return on acovered investment in Canadianstock? How would you cover?