When Short-Term Interest Rates Become Lower in Tokyo Than in New

question 100

Multiple Choice

When short-term interest rates become lower in Tokyo than in New York,interest arbitrage operations will most likely result in a:

• A) Increase in the spot price of the yen
• B) Increase in the forward price of the dollar
• C) Sale of dollars in the forward market
• D) Purchase of yen in the spot market

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Definitions:

Minimum Contacts

A legal standard determining whether a court has jurisdiction over a defendant, based on the defendant's connections to the area where the court is located.

In Rem Jurisdiction

The power of a court over the property or status of an out-of-state defendant located within the court’s jurisdiction area.

Property

Legal rights or interests in the ownership and usage of land, objects, intellectual properties, or other possessions.

Jurisdiction

The authority granted to a legal body to administer justice within a defined field of responsibility, such as geographical area or subject matter.