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An American investor purchased CAD to invest in Treasury bill for 1 8 0 days and he booked a 1 8 0 - day forward
An American investor purchased CAD to invest in Treasury bill for days and he booked a day forward contract to sell the CAD against the USD. Select the answer that explains the investors decision.
A The investor has sold the USD and he will buy them back at a forward premium superior than the rate differential of the two currencies.
B The investor has a CIA giving him a premium greater than the interest rate differential of the two currencies.
C The investor has invested in the currency giving the highest interest rate and he will sell back the CAD at a discount forward rate.
D The investor has invested in the currency giving the lowest interest rate, he will buy back the CAD at a forward rate greater than the spot rate.
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