A ________ Strategy Replicates the Forward Contract by Borrowing in One

question 5

Multiple Choice

A ________ strategy replicates the forward contract by borrowing in one currency,converting to the other currency,and investing in the new currency.

• A)cash-and-carry
• B)futures
• C)forward
• D)foreign investment
• E)covered interest

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Definitions:

Centimeters

A unit of length in the metric system, equal to one hundredth of a meter.

Inches

A unit of length in the Imperial and US customary systems, equal to 1/12 of a foot.

Yards

A unit of measurement equal to 3 feet or 0.9144 meters.

Feet

A unit of linear measurement equal to 12 inches or 0.3048 meters, used primarily in the United States for measuring height or distances.