If a Speculator Expects That the Fed Will Intervene Heavily

question 20

Multiple Choice

If a speculator expects that the Fed will intervene heavily by exchanging dollars for Japanese yen in order to affect the exchange rate, she would most likely ____ to capitalize on this intervention.

• A) purchase yen put options
• B) sell yen futures contracts
• C) purchase yen call options
• D) buy U.S. Treasury bonds

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Definitions:

Parasympathetic Division

A division of the autonomic nervous system responsible for stimulating "rest-and-digest" or "feed and breed" activities when the body is at rest.

Antagonistic Effects

When two or more factors work in opposition to each other, often seen in pharmacology or physiology.

ANS

Autonomic Nervous System, a part of the nervous system that controls involuntary body functions like heartbeat and digestion.

Blood Vessels

Tubular structures carrying blood throughout the body, including arteries, veins, and capillaries.