Which of the Following Appears to Be a Safe Assumption

question 36

Multiple Choice

Which of the following appears to be a safe assumption when there is no difference between the forward and spot exchange rates between two currencies?

• A) The countries have equal nominal interest rates.
• B) The spot rate is expected to change.
• C) Expected inflation is less than the nominal rate.
• D) Both currencies are selling at a premium relative to the other.

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Definitions:

Liable

Having legal responsibility or obligation.

Articles of Incorporation

A document filed with a state government to legally document the creation of a corporation.

Secretary of State

An official in many countries who is in charge of foreign affairs, or in some cases, domestic affairs and state administration.

Filed

Filed refers to the process of submitting a document officially to a court or government agency, making it part of the public record.