Currently,a U

question 34

Multiple Choice

Currently,a U.S.trader notes that in the 6-month forward market,the Japanese yen is selling at a premium (that is,you receive more dollars per yen in the forward market than you do in the spot market) ,while the British pound is selling at a discount.Which of the following statements is CORRECT?

• A) If interest rate parity holds,6-month interest rates should be the same in the U.S. ,Britain,and Japan.
• B) If interest rate parity holds among the three countries,the United States should have the highest 6-month interest rates and Japan should have the lowest rates.
• C) If interest rate parity holds among the three countries,Britain should have the highest 6-month interest rates and Japan should have the lowest rates.
• D) If interest rate parity holds among the three countries,Japan should have the highest 6-month interest rates and Britain should have the lowest rates.
• E) If interest rate parity holds among the three countries,the United States should have the highest 6-month interest rates and Britain should have the lowest rates.

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Definitions:

Emotional Experience

The array of feelings arising from stimuli or situations that an individual encounters, encompassing reactions such as joy, sorrow, fear, and anger.

Behavioural Component

In psychology, relates to the actions or reactions of an individual in response to external or internal stimuli.

Physiological Component

The aspects of a biological or psychological phenomenon that are related to the functions of living organisms and their parts.

Emotional Experience

The complex feeling states that arise from the sensory input and can include reactions and physiological expressions.