When the yen (JPY) is selling at a premium in the forward market, the Euro (EUR) price of the yen in the forward market (i.e. EUR/JPY) would be ________ the spot price of EUR/JPY.

A. larger than B. the same as C. smaller than

According to the international Fisher Effect, if an investor purchases a five-year U.S. bond that has an annual interest rate of 5% rather than a comparable British bond that has an annual interest rate of 6%, then the investor must be expecting the _________ to ___________ .

A.

GBP/USD; increase

B.

GBP/USD; decrease

C.

GBP/USD; remain unchanged