When the futures price on euros is below the forward rate on euros for the same settlement date, astute investors may attempt to simultaneously ____ euros forward and ____ euro futures.
A) sell; sell
B) buy; sell
C) sell; buy
D) buy; buy

Question

Quizplus · Accepted Answer

Astute investors would buy euros forward at the lower futures price and sell euro futures at the higher forward rate to profit from the price difference.

When the Futures Price on Euros Is Below the Forward