If Investors Can Cover Themselves in the Forward Market, They

question 12

Multiple Choice

If investors can cover themselves in the forward market, they will take advantage of interest rate differentials by:

• A) buying assets (lending) denominated in the high-interest rate currency, and selling assets (borrowing) in the low-interest rate currency.
• B) removing funds from both investments.
• C) turning over their investment portfolio to an expert in one of the two nations.
• D) selling assets denominated in high-interest rate currency and buying assets in the low-interest rate currency.

---

Definitions:

Perjury

The criminal act of lying or making misrepresentations under oath, especially in a court of law, punishable as a serious offense because it undermines the judicial process.

Grand Jury

A Grand Jury is a legal body empowered to conduct official proceedings to investigate potential criminal conduct and decide whether criminal charges should be brought.

Family and Medical Leave Act

A United States federal law enacted in 1993 that requires covered employers to provide employees with job-protected and unpaid leave for qualified medical and family reasons.

Family-Values

A term often used to refer to moral beliefs and social norms regarding the importance of family unity, parental responsibilities, and traditional domestic roles.