ABC Company can borrow at 5% in Canadian dollar and at 8% in US dollar. XYZ Company can borrow at 4% in Canadian dollar and at 5% in US dollar.

Question 61 options:

	XYZ Company should borrow both currencies as iit can borrow at a lower rates in both.
	XYZ Company should borrow in US dollar and ABC Company should borrow in Canadian dollar.
	XYZ Company should borrow in Canadian dollar and ABC Company should borrow in US dollar.
	none of these

Germany has a higher rate of inflation than Japan. The nominal exchange rate is constant. In this scenario, which of the following statement is true?

Question 57 options:

	Germany experiences a decrease in its real exchange rate.
	Japan experiences an increase in its real exchange rate.
	Germany experiences an increase in its real exchange rate.
	German goods are cheaper now