You are expecting a payment of 500,000PLN 3 years from now. The risk-free rate of return is 4 % in Canada and 2 % in Poland. The inflation rate is 4 % in Canada and 1 % in Poland. Currently, you can buy 380PLN for $100. How much will the payment 3 years from now be worth in dollars?

A) $138,700
B) $138,900
C) $139,800
D) $142,300
E) $144,169

Risk-Free Rate

The assumed yield an investment would generate if it carried no risk, often indicated through government bond yields.

Inflation Rate

The velocity at which the comprehensive price index for goods and services rises, lessening monetary value.

Payment

An amount of money paid by one party to another in exchange for goods, services, or to fulfill a contractual obligation.