If the Spot Rate Between the U

question 54

Multiple Choice

If the spot rate between the U.S. dollar and the Mexican peso is $1 = 2.45 peso and the 3-month forward rate is $1 = 2.05 pesos, is the forward peso selling at a discount or a premium?

• A) Discount
• B) Premium
• C) Unable to determine with the cross-rates

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Definitions:

Osteoporosis

A medical condition characterized by the weakening of bones, making them fragile and more likely to break.

Marathon

A long-distance running race with an official distance of 42.195 kilometers (approximately 26.219 miles), usually run as a road race.

Sedentary

A lifestyle characterized by a lot of sitting and lying down with very little to no exercise, leading to various health risks.

Alcohol Drinks

Beverages containing ethanol, commonly known as alcohol, including beer, wine, and spirits.