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Question
Use the following information to answer questions 6-9.
Table 6.1: Spot and Forward Exchange Rates on May 5, 2012.
|
|
Currency per U.S. dollar |
|||
|
|
May 5 |
1-month forward |
3-month forward |
1-year forward |
|
Japanese yen |
80.100 |
78.750 |
78.150 |
77.250 |
Refer to Table 6.1. Comparing the yens forward rates against the yens spot rate, over the period of a forward contract, we would expect the yens spot rate to:
a. remain constant against the dollar
b. appreciate against the dollar
c. depreciate against the dollar
d. depreciate against the dollar in the first 30 days and then appreciate afterward.
Answer
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Related questions
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