Question

1. You believe that the US dollar (USD) will fall in value against the Canadian Dollar (CAD). Your best strategy is to...
   
   
   

	A.	Borrow in CAD, exchange your CAD for USD, put your USD in a US bank until the dollar depreciates and finally, exchange your USD for CAD and repay your CAD loan.
	B.	Write a call option on the US Dollar
	C.	Buy a call option on the Canadian Dollar
	D.	Buy a put option on the US Dollar
	E.	All of the above a good strategies.
	F.	None of the above wrong

Answer 1

  

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If the Dollar Falls against the CAD then following are the stretegies : -

• Borrow in CAD, exchange your CAD for USD, put your USD in a US bank until the dollar depreciates and finally, exchange your USD for CAD and repay your CAD loan.
• Write a call option on the US Dollar
• Buy a call option on the Canadian Dollar
• Buy a put option on the US Dollar

All of the above are the good stretegies for taking profit from Dollar expected fall.

option E is correct.