Because of the Threat of Arbitrage,the Forward Rate Must Equal

question 38

True/False

Because of the threat of arbitrage,the forward rate must equal the spot rate at all times.

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Definitions:

FIFO Method

An inventory valuation method that assumes the first items placed in inventory are the first sold, standing for "First In, First Out."

Periodic Inventory System

A system where inventory levels and the cost of goods sold are determined at the end of the accounting period through physical inventory counts.

Credit Memo

A document issued by a seller to a buyer, reducing the amount the buyer owes to the seller under previous transactions.