If a Foreign Exchange Speculator Expects the Spot Rate of the Dollar

question 27

Multiple Choice

If a foreign exchange speculator expects the spot rate of the dollar nine months from today to be lower than today's forward rate on the dollar for delivery in nine months,she may

• A)buy dollars in the spot market nine months from today.
• B)sell dollars in the spot market nine months from today.
• C)sell dollars forward today and buy them in the spot market nine months from today.
• D)buy dollars forward today and resell them in the spot market nine months from today.

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Definitions:

Expectation

Beliefs or forecasts about future events or outcomes, often based on experience, knowledge, or hypothetical scenarios.

Pain Sensations

The uncomfortable sensory and emotional experience associated with actual or potential tissue damage.

Music

Music is an art form and cultural activity that involves the creation of sounds in time and space, using elements such as rhythm, melody, harmony, and timbre.

Intensity

The magnitude or strength of a phenomenon, such as light, sound, or an emotional experience, often measured on a quantitative scale.