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Use the following information to answer the question

Finance

Use the following information to answer the question. The Canadian annual interest rate is 2 percent. The interest rate in the U.K. is 4 percent. The spot rate is CAD$1.60/£. The forward rate is CAD$1.58/£ and has a one-year maturity. An arbitrager can borrow a maximum of CAD$1,000,000 or £625,000. What is the net cash flow in one year?

  A.

CAD$238.65

  B.

CAD$14,000

  C.

CAD$46,207

  D.

CAD$11,300

  E.

CAD$7,000

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