Consider the Interaction Between U

question 36

Multiple Choice

Consider the interaction between U.S. dollars and U.K. pounds. When the forward premium on the dollar is zero, it means:

• A)the current spot price of dollars equals the future spot price of dollars.
• B)the future spot price of dollars will be equal to the current forward price of dollars.
• C)the current forward price of dollars equals the current spot price of dollars.
• D)the spot exchange rate value of the pound is moving toward $1 per pound.

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