Suppose that the Japanese yen is selling at a forward discount in the forward-exchange market. This implies that most likely | Faculties

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📊 International Financial Management

Q. Suppose that the Japanese yen is selling at a forward discount in the forward-exchange market. This implies that most likely

(A) this currency has low exchange-rate risk.
(B) this currency is gaining strength in relation to the dollar.
(C) interest rates are higher in Japan than in the United States.
(D) interest rates are declining in Japan.

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✅ Correct Answer: (C) interest rates are higher in Japan than in the United States.

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