When the futures price is equal to the spot rate of a given currency, and the foreign country exhibits a higher interest rate than the domestic interest rate, astute investors may attempt to simultaneously __________ the foreign currency, invest it in the foreign country, and ___________ futures in the foreign currency. Select one: a. buy; buy. b. sell; buy. c. buy; sell. d. sell; sell.

When the futures price is equal to the spot rate of a given currency, and the foreign country exhibits a higher interest rate than the domestic interest rate, astute investors may attempt to simultaneously the foreign currency, invest it in the foreign country, and _ futures in the foreign currency. Select one: a. buy; buy. b. sell; buy. c. buy; sell. d. sell; sell.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter11: Managing Transaction Exposure

Section: Chapter Questions

Problem 53QA

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