Assume the Spot Rate of a Currency Is £0

question 86

Multiple Choice

Assume the spot rate of a currency is £0.67 and the 360-day forward rate is £0.63. The forward rate of this currency exhibits a ____ of ____ on an annualized basis.

• A) discount; 5.97%
• B) premium; 6.35%
• C) premium; 5.97%
• D) discount; 6.35%

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Definitions:

UCC

The Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States, aimed at standardizing practices across states.

Remedies

Legal remedies involve the methods and means through which a court of law enforces a right, imposes a penalty, or makes another court order to impose its will.

Cancelling Contract

The act of terminating an agreement or contract before its fulfillment or end date.

UCC

Stands for the Uniform Commercial Code, a set of laws that regulate sales and commercial transactions in the United States.