Peter Simpson Thinks That the U

question 7

Multiple Choice

Peter Simpson thinks that the U.K. pound will cost $1.43/£ in six months. A 6-month currency futures contract is available today at a rate of $1.44/£. If Peter was to speculate in the currency futures market, and his expectations are correct, which of the following strategies would earn him a profit?

• A) Sell a pound currency futures contract.
• B) Buy a pound currency futures contract.
• C) Sell pounds today.
• D) Sell pounds in six months.

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Definitions:

Rosabeth Moss Kanter

A prominent sociologist known for her research on business management and organization, particularly in the areas of strategy, innovation, and diversity.

Tokenism

The practice of making only a perfunctory or symbolic effort to include or represent members of minority groups, often to give the appearance of equality.

Hierarchical Structure

An organizational form that ranks entities in levels of importance or authority, often found in businesses, governments, and institutions.

Reference Group

Any group that individuals use as a standard for evaluating themselves and their own behavior.