Question
Quan Vu is a currency speculator who enjoys betting on changes in the foreign currency exchange market. Currently the spot price for the Japanese yen
Quan Vu is a currency speculator who enjoys betting on changes in the foreign currency exchange market. Currently the spot price for the Japanese yen is 129.87/$ and the 6-month forward rate is 128.53/$. Vu thinks the yen will move to 128.00/$ in the next six months. If Vus expectations are correct, then he could profit in the forward market by _________ and then _______.
a. | buying yen for 128.00/$, selling yen at 128.53/$ | |
b. | buying yen for 128.53/$, selling yen at 128.00/$ | |
c. | There is not enough information to answer this question. | |
d. | He could not profit in the forward market |
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