QUESTION 17

1. Arrow Corporation expects to receive a payment of CAD670,000 four years from now. The risk-free rate of return is 1.45 percent in the U.S. and 1.10 percent in Canada. Assume the current exchange rate is CAD1 = $.7353. How much will the payment four years from now be worth in U.S. dollars? (Hint: Find the expected spot rate four years from today, then convert the payment in CAD into US$)

   	a	$557,185
   	b	$527,663
   	c	$499,609
   	d	$463,750
   	e	$430,911