Jasper Pernik Is a Currency Speculator Who Enjoys "Betting" on Changes

question 15

Multiple Choice

Jasper Pernik is a currency speculator who enjoys "betting" on changes in the foreign currency exchange market. Currently the spot price for the Japanese yen is ¥129.87/$ and the 6-month forward rate is ¥128.53/$. Jasper thinks the yen will move to ¥128.00/$ in the next six months. If Jasper buys $100,000 worth of yen at today's spot price and sells within the next six months at ¥128/$, he will earn a profit of:

• A) $146.09.
• B) $101,460.94.
• C) $1460.94.
• D) nothing; he will lose money

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