You are expecting a payment of C$100,000 four years from now.The risk-free rate of return is 3 percent in the U.S.and 4 percent in Canada.The inflation rate is 3 percent in the U.S.and 2 percent in Canada.Assume the current exchange rate is C$1 = $.98.How much will the payment four years from now be worth in U.S.dollars?
A) $98,887
B) $94,176
C) $99,300
D) $106,184
E) $98,059
Correct Answer:
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