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USNet, Inc., an American networking equipment firm, sells CAD12.5 million worth of networking gear to a Canadian telecom company. The term of the transaction calls

USNet, Inc., an American networking equipment firm, sells CAD12.5 million worth of networking gear to a Canadian telecom company. The term of the transaction calls for a payment of CAD 12.5 million to be paid immediately. Canadian interest rate is 5% per year, and the US interest rate is 2%. How much is USNets transaction exposure?

A. CAD 12.75 million
B. CAD 13.125 million
C. CAD 12.5 million
D. CAD 0

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