For an investor who starts with dollars and wants to end up with dollars in the future, which of the following choices is an example that includes speculating?
A. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and then buy dollars at the future spot rate
B. Buy a dollar-denominated financial asset
C. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and sign a forward exchange contract to buy dollars
D. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and sign a forward exchange contract to sell the foreign currency
Answer: A
You might also like to view...
A debtor nation means a nation
A) whose imports exceeds its exports. B) whose current account is less than its capital account. C) who—through its history—has invested less in the rest of the world than other countries have invested in it. D) whose current lending to the rest of the world exceeds its borrowing from the rest of the world.
To measure the annual increase in the capital stock most broadly, we should include
a. business purchases of plant and equipment, changes in inventory, and new home construction b. private investment spending plus government investment spending c. stocks and bonds purchased by firms, total investment, and human capital d. purchases of durable goods and human capital e. net private investment spending, net government investment spending, purchases of durable goods, and investment in human capital