A Contract to Buy Japanese Yen Three Months Forward at a Price

question 20

Multiple Choice

A contract to buy Japanese yen three months forward 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 Nasdaq Exchange.

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Definitions:

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