The Six-Month Forward Quote for German Euro Is E1

question 114

Multiple Choice

The six-month forward quote for German Euro is E1.6/US$, and the spot price of German Euro is €1.7/US$.Which of the following statements is true?

• A)Forward discount on German Euro is 6.25%
• B)Forward premium on German Euro is 6.25%
• C)Forward discount on US$ is 7.25%
• D)Forward premium on US$ is 6.25%

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Definitions:

Incongruence

A state of being where there is a discrepancy between one's self-image and the reality of one’s experiences or behaviors, often leading to psychological distress.

Actual Experience

Real, lived events and interactions that an individual undergoes, as opposed to theoretical knowledge or speculative scenarios.

Abraham Maslow

A psychologist known for developing the hierarchy of needs, a theory that describes human motivation based on fulfilling a series of needs from basic to self-actualization.

Psychology Empirical

The approach in psychology that emphasizes the role of empirical evidence obtained through observation and experimentation in the study of mental processes and behavior.