The Spot Rate Is $1

question 28

Multiple Choice

The spot rate is $1.00/€ and the one-year forward rate is $1.10/€. What is the forward premium (or discount) on the euro?

• A) 0.10 basis point
• B) 1 basis point
• C) 10 basis points
• D) 100 basis points
• E) 1,000 basis points

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Definitions:

Triceps Brachii

A major muscle of the upper arm involved in the extension of the elbow joint.

Supinate

The rotation of the forearm or foot so that the palm or sole is facing upwards or forwards.

Pronate

To rotate the forearm or the hand so that the palm faces downwards or backwards.

Rotate

The act or process of moving or turning around a central axis or point.