If UK Interest Rates Are Higher Than Japanese Interest Rates, Then

question 15

Multiple Choice

If U.K. interest rates are higher than Japanese interest rates, then the theory of covered Interest arbitrage would suggest that, in the pound/yen exchange markets, the yen would Be at a forward __________ and the pound would __________.

• A) discount; be at a forward premium
• B) discount; also be at a forward discount
• C) premium; also be at a forward premium
• D) premium; be at a forward discount

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Definitions:

Ideal Self

The person one desires to be, encompassing one's goals, aspirations, and standards of perfection.

Mentor

A person who acts as a guide or teacher for another, leading that person through experiences.

Honestly

The quality of being truthful, sincere, and free from deceit or fraud in one's actions, expressions, and communications.

Yourself

The reflexive form of “you,” referring to the person being addressed by the speaker or writer.