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Question
What is the end-of-year profit or loss on the bank's cash position if in one year Canadian bond rates increase to 7.5 percent? Assume no change in either current U.S. interest rates or current exchange rates. (Choose the closest answer)
A. Loss of US $5,000.
B. Profit of US $15,000.
C. Loss of C $119,000.
D. Profit of C $50,000.
E. Loss of C $50,000.
Answer
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