A US Firm Plans to Borrow Swiss Francs Today for a a One-Year

question 44

Multiple Choice

A U.S. firm plans to borrow Swiss francs today for a one-year period. The Swiss interest rate is 9%. It uses today's spot rate as a forecast for the franc's spot rate in one year. The U.S. one-year interest rate is 10%. The expected effective financing rate on Swiss francs is:

• A) equal to the U.S. interest rate.
• B) less than the U.S. interest rate, but more than the Swiss interest rate.
• C) equal to the Swiss interest rate.
• D) less than the Swiss interest rate.
• E) more than the U.S. interest rate.

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Definitions:

Synapse

The junction between neurons where electrochemical signals are transmitted from one neuron to another, facilitating communication within the brain.

Neuronal

Relating to neurons, which are the basic working units of the brain, responsible for receiving, processing, and transmitting information through electrical and chemical signals.

Neurons

Specialized cells in the nervous system that transmit information to other nerve cells, muscle, or gland cells through electrical and chemical signals.

Myelinated Axons

Axons that are wrapped in a fatty sheath called myelin, which speeds up the transmission of electrical signals along the nerve cells.