If the Forward (Direct Quote)exchange Rate Is Lower Than the Spot

question 108

Multiple Choice

If the forward (direct quote) exchange rate is lower than the spot rate, the forward currency is said to be trading at a:

• A)premium.
• B)gain.
• C)discount.
• D)loss.

---

Definitions:

Free Cash Flow

The amount of cash generated by a business after accounting for capital expenditures, indicating the financial health and liquidity.

Operating Cash Flow

Represents the amount of cash generated by a company's normal business operations.

Fixed Asset Additions

Expenditures involving the acquisition or improvement of long-term assets that increase the company’s operational capacity or extend the asset's useful life.

Accounts Receivable

Amounts owed by customers to a company for goods or services provided on credit.