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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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