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?

Answer rating: 100% (QA)

SOLUTION To determine which investment TIAACREF should make we need to calculate the return on inves... View the full answer