22-124 If in one year there is no change in either interest rates or exchange rates,what is the end-of-year profit or loss of your bank's cash position? Assume that annual interest is paid on both the CD and the Canadian bonds on the date of liquidation in exactly one year.
A)Profit of US$20,000.
B)Loss of C$224,000
C)Profit of US$50,000.
D)Profit of C$63,000.
E)Profit of US$313,000.

Question

Quizplus · Accepted Answer

The profit of US$20,000 is calculated based on the interest earned from the bank's cash position without any changes in interest or exchange rates.

22-124 If in One Year There Is No Change in Either