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Question
Suppose that Citibank buys a large amount of Japanese yen from Toyota and Citibank does not want to continue holding too much yen. How should Citibank adjust its buy rate and sell rate of the yen (yen per dollar) to square off?
a. Citibank has to raise both buy and sell rates.
b. Citibank has to raise the buy rate, but lower the sell rate.
c. Citibank has to lower the buy rate, but raise the sell rate.
d. Citibank has to lower both buy and sell rates.
Answer
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Related questions
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Risk premium equals to:a. expected premium minus forward premium.b. expected premium plus forward premium.c. forward premium minus expected premium.d. exchange rate premium plus forward premium.
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The equivalence of the exchange rate to the ratio of price levels between two countries is referred to as the:
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According to the monetary approach to the balance of payments, which of the following economic events would help a country to resolve its balance of trade deficit?
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Considering the internal balance in an economy, which of the following could lead to lower interest rate and higher income?
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In foreign exchange forecasting, what is a good forecast?
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c. When the forecast is high.
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Q:
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c. 6.67%
d. 12.5%