Jasper Pernik Is a Currency Speculator Who Enjoys "Betting" on Changes

question 84

Multiple Choice

Jasper Pernik is a currency speculator who enjoys "betting" on changes in the foreign currency exchange market. Currently the spot price for the Japanese yen is ¥129.87/$ and the 6-month forward rate is ¥128.53/$. Jasper thinks the yen will move to ¥128.00/$ in the next six months. If Jasper buys $100,000 worth of yen at today's spot price her potential gain is ________ and her potential loss is ________.

• A) $100,000; unlimited
• B) unlimited; unlimited
• C) $100,000; $100,000
• D) unlimited; $100,000

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Definitions:

Spontaneous Recovery

The reappearance of a learned response after extinction has occurred and time has passed, in classical conditioning.

Time Lapse

A photographic technique that captures a sequence of frames at set intervals to show changes that take place slowly over time.

Generalization

The process of forming general statements or conclusions from specific instances.

Extinguished CR

In classical conditioning, this refers to the gradual weakening and eventual disappearance of the conditioned response when the conditioned stimulus is repeatedly presented without the unconditioned stimulus.