22-127 What is the end-of-year profit or loss on the bank's cash position if in one year both Canadian bond rates increase to 7.5 percent and the exchange rate falls to US$0.765 per Canadian dollar (Assume no change in U.S.interest rates.)
A) Loss of US$12,000.
B) Loss of US$75,000.
C) Profit of C$9,000.
D) Profit of US$50,000.
E) Loss of C$119,000.
Correct Answer:
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