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The treasurer of a Canadian company has C$1,000,000 to invest for 90 days. A 90-day U.S. commercial paper offers a yield of 5.00 percent. The
The treasurer of a Canadian company has C$1,000,000 to invest for 90 days. A 90-day U.S. commercial paper offers a yield of 5.00 percent. The present exchange rate of C$ is $0.8980. If the Canadian company decided to invest in U.S. commercial paper, what is the expected (annual) yield if the expected exchange rate of CS at the end of 90 days is $0.8890? (You will find an illustrative example for this type questions in the course content folder)
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