​When the Futures Price on Euros Is Below the Forward

question 2

Multiple Choice

​When the futures price on euros is below the forward rate on euros for the same settlement date, astute investors may attempt to simultaneously ____ euros forward and ____ euro futures.

• A) ​sell; sell
• B) ​buy; sell
• C) ​sell; buy
• D) ​buy; buy

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Definitions:

Income-Consumption Curve

Curve tracing the utility-maximizing combinations of two goods as a consumer’s income changes.

Utility-Maximizing

A principle or strategy of consumers making choices to achieve the highest overall level of satisfaction or utility from their available resources.

Inferior Good

An inferior good is a type of good for which demand decreases as the income of the individual increases, in contrast to a normal good.

Rental Housing

Properties available for rent to provide accommodation, usually on a monthly or yearly lease agreement.