If the Spot Rate of the Israeli Shekel Is 5

question 28

Multiple Choice

If the spot rate of the Israeli shekel is 5.51 shekels per dollar and the 180-day forward rate is 5.97 shekels per dollar, then the forward rate for the Israeli shekel is selling at a ______________ to the spot rate.

• A) 6.09% premium
• B) 6.76% premium
• C) 7.51% discount
• D) 8.35% discount
• E) 9.18% discount

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Definitions:

Payments

The act of transferring money to fulfill an obligation, such as in purchasing goods or services or repaying a loan.

Penalty

A punishment imposed for breaking a law, rule, or contract, which often involves paying a fine or forfeiting something.

Mark-Up

The amount added to the cost of a product or service to cover overhead and profit.

Selling Price

The amount of money for which a product is sold to the customer, after accounting for discounts, rebates, and other adjustments.