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Question
A U.S. resident purchases a bond issued by the Canadian government. If the Canadian dollar appreciates relative to the U.S. dollar over the term of the bond, the U.S. investor will:A. see a higher return on her investment as a result.
B. see a lower return on her investment as a result.
C. not see her return affected since exchange rates are flexible.
D. none of the answers provided is correct.
Answer
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