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Assume You Borrow $5,000 Today,exchange the $5,000 into Yen,and Then

Question 33

Multiple Choice

Assume you borrow $5,000 today,exchange the $5,000 into yen,and then invest the yen for 30 days,at which time you need to pay an invoice to a Japanese supplier.In essence,you have


A) eliminated your long-term exposure to exchange rate risk.
B) achieved an equilibrium known as the international Fisher effect.
C) offset any potential translation exposure to exchange rate risk.
D) entered into a forward contract.
E) generated a profit from triangle arbitrage.

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