What should a speculator do when the one-year forward price of an asset is considered to be too low? Assume that the asset provides no income.

Select one:

a.

The trader should borrow the price of the asset, buy one unit of the asset and enter into a short forward contract to sell the asset in one year

b.

The trader should borrow the price of the asset, buy one unit of the asset and enter into a long forward contract to buy the asset in one year

c.

The trader should short the asset, invest the proceeds of the short sale at the risk-free rate, enter into a short forward contract to sell the asset in one year

d.

The trader should short the asset, invest the proceeds of the short sale at the risk-free rate, enter into a long forward contract to buy the asset in one year