A Forward Market Contract to Buy Japanese Yen Three Months

question 27

Multiple Choice

A forward market contract to buy Japanese yen three months in the future at a price of *105/$will:

• A)Insulate the buyer from changes in interest rates
• B)Protect the buyer from changes in exchange rates
• C)Lock in a profit based on current exchange rates
• D)Require delivery of the yen at the Chicago Board of Trade

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