When Short-Term Interest Rates Become Lower in Tokyo Than in New

question 133

Multiple Choice

When short-term interest rates become lower in Tokyo than in New York,interest arbitrage operations will most likely result in a(n) :

• A) Increase in the spot price of the yen
• B) Increase in the forward price of the dollar
• C) Sale of dollars in the forward market
• D) Purchase of yen in the spot market

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