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:

Spontaneous Recovery

The reappearance of a conditioned response after a period of lessened response.

Positive Psychology

A branch of psychology focused on the study of positive human functioning and flourishing on multiple levels that include the biological, personal, relational, institutional, cultural, and global dimensions of life.

Seligman

Seligman is known for his contributions to positive psychology, notably the concept of "learned helplessness" and theories surrounding optimism and well-being.

Thorndike

An American psychologist known for his work on learning theory and the law of effect, which states that behaviors followed by satisfying consequences are likely to be repeated.