QUESTION 8

1. For an American trader, an interbank quotation of $1.4631/ is in

1. Assume that the yen is selling at a forward discount in the forward-exchange market. Then, most likely

a.

interest rates are higher in Japan than in the United States.

b.

this currency is gaining strength in relation to the dollar.

c.

interest rates are declining in Japan.

d.

this currency has low exchange-rate risk.