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

question 81

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's expectations are correct, then he could profit in the forward market by ________ and then ________.

• A) buying yen for ¥128.00/$; selling yen at ¥128.53/$
• B) buying yen for ¥128.53/$; selling yen at ¥128.00/$
• C) There is not enough information to answer this question.
• D) He could not profit in the forward market.

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Definitions:

Third Party Intervention

The involvement of an external party in a dispute to facilitate a resolution, often through mediation or arbitration.

ADR Effective

Refers to the efficacy of Alternative Dispute Resolution methods in resolving conflicts outside of the traditional legal systems.

Alternative to Litigation

Methods or processes used to resolve disputes without resorting to judicial proceedings.

Unpleasant Event

A negative experience that can cause emotional distress, discomfort, or dissatisfaction.