Francis wants to redeem his US Asset Allocation Fund as he needs the money for a down payment for a home purchase. The current proceeds from the redemption are USD $27,859, and the current CAD/USD exchange rate is 0.7353. How much will Francis receive in Canadian dollars when he redeems the Funds? Please round your answer to the nearest dollar.

The question requires converting redemption proceeds from U.S. dollars (USD) to Canadian dollars (CAD). The provided exchange rate, CAD/USD = 0.7353, is interpreted as the value of one Canadian dollar in U.S. dollars (i.e., 1 CAD = 0.7353 USD). To find the equivalent amount in Canadian dollars, the U.S. dollar amount must be divided by this exchange rate. Calculation: USD $27,859 / 0.7353 = CAD $37,887.94. Rounding to the nearest dollar gives $37,888.

B. $36,698: This is an incorrect calculation, possibly using a slightly different, incorrect exchange rate divisor.
C. $42,861: This is an incorrect calculation, possibly using a significantly different, incorrect exchange rate divisor.
D. $35,859: This is an incorrect calculation, possibly using a slightly different, incorrect exchange rate divisor.

1. Canadian Securities Institute. (2023). Investment Funds in Canada. Chapter 13: Mutual Fund Administration. Section: "Currency Exchange". The text explains that to convert a foreign currency amount to the domestic currency, you divide by the exchange rate when it is quoted as foreign units per domestic unit.

2. Madura, J. (2021). International Financial Management (14th ed.). Cengage. Chapter 5: "Currency Derivatives". The text details the mechanics of currency conversion, confirming that dividing the foreign currency amount by the direct quote (foreign units per domestic unit) yields the domestic currency equivalent.