Question: TIAA-CREF - the US Pension fund - is considering a risk-proof investment of US$ 1 billion for the next 180 days. Investment opportunities include a

TIAA-CREF - the US Pension fund - is considering a risk-proof investment of US$ 1 billion for the next 180 days. Investment opportunities include a US zero treasury bond offered at 98% maturing at 100% in 180 days and an Australian money market fund yielding 8.25% annually. The AUD is at a six-month forward discount of 1.45% vis-a-vis the US$. What would you advise TIAA-CREF to invest in?

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