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Question
A U.S. bank has just extended a U.S. $10 million loan to a Canadian firm at the rate of U.S. prime plus 2 percent, payable in U.S. dollars, one year from now. The current Canadian dollar/U.S. dollar exchange rate is 1.367. With a prime rate of 7 percent, what is the amount of interest paid in a year?a. C$ 1,230,300
b. $900,000
c. $700,000
d. C$658,376
Answer
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