Question: Throughout the 1 9 9 0 s , interest rates in CanadaCanada were lower than interest rates in BrazilBrazil. As a result, many CanadianCanadian investors

Throughout the

1990

,

interest rates in CanadaCanada were lower than interest rates in BrazilBrazil. As a

result, many CanadianCanadian investors were tempted to borrow in CanadaCanada and invest the proceeds in BrazilBrazil. Which of the following explains why this strategy does not represent an abritrage

opportunity?

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