Consider the Following: If the Market Futures Price Is

question 31

Multiple Choice

Consider the following: If the market futures price is 1.69 A$/$, how could you arbitrage

• A)Borrow Australian dollars in Australia, convert them to dollars, lend the proceeds in the United States, and enter futures positions to purchase Australian dollars at the current futures price.
• B)Borrow U.S.dollars in the United States, convert them to Australian dollars, lend the proceeds in Australia, and enter futures positions to sell Australian dollars at the current futures price.
• C)Borrow U.S.dollars in the United States and invest them in the U.S.and enter futures positions to purchase Australian dollars at the current futures price.
• D)Borrow Australian dollars in Australia and invest them there, then convert back to U.S.dollars at the spot price.
• E)There is no arbitrage opportunity.