​When the Futures Price on Euros Is Below the Forward

question 2

Multiple Choice

​When the futures price on euros is below the forward rate on euros for the same settlement date, astute investors may attempt to simultaneously ____ euros forward and ____ euro futures.

• A) ​sell; sell
• B) ​buy; sell
• C) ​sell; buy
• D) ​buy; buy

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Definitions:

Parent-Subsidiary Organization

A corporate structure in which a parent company owns a controlling interest in one or more subsidiary companies, allowing for centralized governance and operational synergy.

Liabilities

Financial obligations or debts that a company or individual owes to others, which need to be settled over time.

Effectively Control

Effectively control in financial terms refers to the power to direct the financial and operational policies of an entity so as to gain benefits from its activities, often achieved through ownership, contracts, or other means.

Minimum Total Price

The lowest possible aggregate amount that can be charged or paid for a particular set of goods or services.