Maria borrowed $$5000$ @ an interest rate of $5\%$ for $1$ year and purchased ABC stock with the loan in her RRSP$.$ The stock pays a $3\%$ dividend. At the end of the year, she sold ABC for $$6000$ and repaid the loan. Explain to Maria whether the interest on the loan is tax deductible.

The interest is not tax deductible because the shares were held for less than $2$ years.

The interest is not tax deductible because the investment returns are tax deferred.

The interest is tax deductible because the gains $+$ dividend are taxable.

The interest is not tax deductible because the loan period was too short.