If the Spot Rate for Swiss Francs Is $0

question 52

Multiple Choice

If the spot rate for Swiss francs is $0.6658/franc and the 180-day forward rate is $0.6637, the market is indicating that the Swiss franc is expected to _____.

• A) strengthen relative to the dollar
• B) weaken relative to the ECU
• C) lose value relative to the dollar over the next 6 months
• D) gain value relative to the dollar over the next 6 months

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Definitions:

Advantages

Benefits or favorable factors that contribute to success or effectiveness in a particular context.

Disadvantages

Negative aspects or drawbacks associated with a situation, decision, or action.

Design Element

Fundamental aspects or components used in creating a visual design, such as color, shape, line, texture, space, and form.

Contrast

The state of being strikingly different from something else in juxtaposition or close association.