Question

An Investor bale es hat he u dollar w rsa In value re at va to he Japanese yen he sama as or s considering two nvestments th ldan cal tsk and ch m charac enstes na a Japanese yen nvestment and tha ם har ls a u do lar vast nt Should tha has or purchasa ha Japanesa en Investment? Select the best amewer below.) f the nvesmet Ther B.No. t tha valus af tha dolar goes up, then the Investor uill rche mora dolars for the yan necalved from the sals oft tha Invastment Tharators,the invastor should punchase the U S cellar Investman O C. Yes. If the value of the dellsr gues up, then the investor wil receive fewer dollars for the yen received from the sale of the investment. Therefore, the incestor should purchase the yen inwestment

Answer 1

If the investor purchases yen, then first he will have to sell dollars to purchase yen, and at the time of bringing back his investment in U.S, he will have to sell yen to receive dollars. If U.S dollar were to gain against yen, then fewer dollars will be received when yen is sold, hence, the answer is:

A. No, If the value of the dollar goes up, then the investor will receive fewer dollars for the yen received from the sale of the investment . Therefore the investor should purchase the dollar investment