When the U.S. exchange rate rises and the expected future exchange rate does not change, the expected profit from buying U.S. dollars today
A) does not change
B) falls
C) may rise, fall, or stay the same
D) also rises

Question

Quizplus · Accepted Answer

When the exchange rate of the U.S. rises, it becomes more expensive to buy U.S. dollars. Therefore, the expected profit from buying U.S. dollars today falls.