Suppose that Barclays Bank of the United Kingdom expects the exchange rate to be $1.40 per pound at the end of the year.If today's exchange rate is $1.50 per pound,Barclays will

Question

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Barclays expects the exchange rate to be $1.40 per pound at the end of the year, which is lower than the current exchange rate of $1.50 per pound. This means that Barclays anticipates that the pound will depreciate against the dollar, and therefore it will be more profitable to buy dollars today and hold them until the end of the year.

Suppose That Barclays Bank of the United Kingdom Expects the Exchange