Assume That the Spot Price for Converting Pounds into Dollars

question 59

Multiple Choice

Assume that the spot price for converting pounds into dollars is £1 = $1. A speculator converts £1 million into dollars today and enters into a forward contract to convert the dollars back into pounds after six months. If the spot rate after six months is £1 = $1.25, which of the following statements will be true?

• A) The speculator will make a profit of $0.25 million.
• B) The speculator will make a loss of £0.2 million.
• C) The speculator will make a loss of $0.8 million.
• D) The speculator will make a profit of £0.2 million.

Understand the economic and social consequences of New Deal policies on American agriculture and industry.

Comprehend the significance of the Social Security Act of 1935 and its impact on Americans.

Identify the key factors that led to the end of the Great Depression.

Analyze the impact of international and trade policies on the U.S. economy during the 1930s.

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Definitions:

Theory of Reasoned Action

A framework for understanding the relationship between attitudes, intentions, and behaviors, emphasizing the role of cognitive reasoning in behavioral decision-making.

Attitude Toward Buying

Refers to a consumer's mindset or predisposition regarding the purchase of a product or service.

Post-purchase

Refers to activities and experiences that occur after buying a product or service, including customer satisfaction and loyalty.

Reported Attitude

An attitude expressed or communicated by an individual, which may or may not accurately mirror their actual beliefs or feelings.