[Related to the Making the Connection] Suppose you are convinced that the value of the Canadian...
[Related to the Making the Connection] Suppose you are convinced that the value of the Canadian dollar will rise relative to the U.S. dollar.
An investor might make a profit based on this conviction in all of the following ways, except:
A. Buy a call option on the Canadian dollar.
B. Buy Canadian dollar futures contracts.
C. Buy Canadian dollars in the forward market.
D. Sell put contracts on the U.S. dollar.
Homework Answers
Option D is correct
Sell put contracts on the U.S. dollar
This is not the strategy to profit from the given market conditions and forecasts, as writing a put on USD will make position go in loss as the put option will go ITM.
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