If the Spot Price of the Swiss Franc Is $0

question 164

True/False

If the spot price of the Swiss franc is $0.4020 and the 90-day forward franc sells for $0.4026,the franc is at a 90-day forward discount of $0.0006,or at a 0.2 percent forward discount per annum against the dollar.

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Definitions:

Monopoly

a market structure characterized by a single seller who has exclusive control over a product or service, often leading to higher prices and less competition.

Long Run

In economics, a period in which all inputs or factors of production can be varied, allowing companies to adjust all aspects of their operations.

Economic Profit

The difference between total revenue and total cost, including both explicit and implicit costs, representing the additional gain over the opportunity cost.

Perfectly Competitive Industry

An industry in which numerous small firms produce identical products, where no single firm can influence the market price, and all firms are price takers.