Multiple Choice
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, then Barclays will
A) sell dollars today because it anticipates losses from buying dollars and holding them.
B) buy dollars today because it anticipates profits from buying dollars and holding them.
C) not buy dollars nor sell dollars because no profits can be realized.
D) stop transacting with both dollar and pound till they stabilize.
Correct Answer:
Verified
Correct Answer:
Verified
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