An Australian Fund Manager Intends to Convert AUD to USD

question 51

Multiple Choice

An Australian fund manager intends to convert AUD to USD now to invest in USD securities for three months.Given they wish to avoid FX risk, which type of FX contract is most suitable?

• A)Spot purchase of USD
• B)Spot sale of USD in three months
• C)Forward sale of AUD
• D)Buy/sell FX swap
• E)Sell/buy FX swap

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Definitions:

Native Ant

A species of ant indigenous to a specific region or habitat, adapted to its local environmental conditions.

Food Chain

A linear network of links in a food web starting from producer organisms and ending at apex predator species.

Predation

The biological interaction where one organism, the predator, hunts and kills another organism, the prey, for food.

Competition

The rivalry between entities to achieve dominance, market share, or win resources, often driving innovation and efficiency.