When Canadians buy US Treasury bonds, they are actually making two investments, one in the foreign securities and the other in

Question

Quizplus · Accepted Answer

When Canadians purchase US Treasury bonds, they are investing in U.S. dollars because they need to convert their Canadian dollars into U.S. dollars to make the purchase. This exposes them to exchange rate risk, making it a separate investment in the currency itself.

When Canadians Buy US Treasury Bonds, They Are Actually Making