Effective annual yield obtain by buying us treasury bills

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Question: You have short-term surplus funds that you want to invest in 90-day treasury bills. From the financial pages of the paper, obtain the current yield on both Canadian and U.S. treasury bills, and obtain a quote on the current 90-day forward-exchange rate from your local bank. What effective annual yield would you obtain by buying U.S. treasury bills both with and without hedging through a forward contract, and how do these yields compare with the yield you could achieve on Canadian treasury bills? Explain your findings.

Reference no: EM131750440

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