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Suppose you work for an Australian company that has contracted with a large distributor in the UK. You expect to receive 1 million from the
Suppose you work for an Australian company that has contracted with a large distributor in the UK. You expect to receive 1 million from the distributor in one year. You can trade at the following prices: Assume that the quoted prices are NOT in equilibrium, how might an investor take advantage of disequilibrium? A. Invest A\$ in a money market at the current Australian interest rate. B. Buy at the spot rate and sell E at the forward rate C. Sell at the spot rate and buy at the forward rate D. None of the above
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