The Current U

question 21

Multiple Choice

The current U.S. dollar value of the Hong Kong dollar is $0.1250/HK$. The 180-day forward rate is $0.12148/HK$. The difference between the two rates suggests that ______.

• A) inflation in the U.S. during the past year was lower than in Hong Kong
• B) interest rates are rising faster in Hong Kong than in the United States
• C) prices in Hong Kong are expected to rise more rapidly than in the United States
• D) the Hong Kong dollar's value is expected to rise against the U.S. dollar
• E) More than one of the above

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Definitions:

Promisors

Individuals or entities that make a promise or agreement within a contract to perform a specified act or duty.

Primary Obligations

The main or initial duties that a party is required to perform under a contract.

Typographical Error

A mistake made in the typing process, often resulting in incorrect spelling or arrangement of letters.

Parol Evidence

A rule that prevents parties to a written contract from presenting extrinsic evidence of terms of the agreement that contradict, modify, or vary the contractual terms written in the document.