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A Canadian Bond Is Initially Priced at Its Face Value

Question 3

Multiple Choice

A Canadian bond is initially priced at its face value of C$1,000. At the end of the year, the bond is selling for C$1,100. If the Canadian dollar appreciates by 10%, with a coupon, what will the U.S. dollar return on the bond equal at the end of the year?


A) 1.05%
B) 27.1%
C) 15%
D) 20%

Correct Answer:

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