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You are expecting a payment of CAD358,000 three years from now. The risk-free rate of return is 1.6 percent in the U.S. and 1.9 percent
You are expecting a payment of CAD358,000 three years from now. The risk-free rate of return is 1.6 percent in the U.S. and 1.9 percent in Canada. The inflation rate is 1.4 percent in the U.S. and 1.7 percent in Canada. Assume the current exchange rate is CAD1 = $.7698. How much will the payment three years from now be worth in U.S. dollars? (Hint: Find the expected spot rate 3 years from today, then convert the payment in CAD into US$)
$253,219 | ||
$281,577 | ||
$265,410 | ||
$296,588 | ||
$273,123 |
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