If speculators expect the spot rate of the yen in 60 days to be ____ than the 60-day forward rate on the yen, they will ____ the yen forward and put ____ pressure on the yen's forward rate.
A) higher; buy; upward
B) higher; sell; downward
C) higher; sell; upward
D) lower; buy; upward

Question

If speculators expect the spot rate of the yen in 60 days to be ____ than the 60-day forward rate on the yen, they will ____ the yen forward and put ____ pressure on the yen's forward rate.​
A) ​higher; buy; upward
B) ​higher; sell; downward
C) ​higher; sell; upward
D) ​lower; buy; upward

Quizplus · Accepted Answer

If speculators expect the spot rate of the yen to be higher than the 60-day forward rate, they will buy the yen forward, anticipating its value will increase. This buying activity puts upward pressure on the yen's forward rate.

If Speculators Expect the Spot Rate of the Yen in 60