A Forward Rate for a Currency Is Said to Exhibit

question 97

Multiple Choice

A forward rate for a currency is said to exhibit a discount if:​

• A)the forward rate exceeds the existing spot rate.
• B)the forward rate is less than the existing spot rate.
• C)the forward rate exceeds the expected future spot rate.
• D)the forward rate is less than the expected future spot rate.
• E)none of the above

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Definitions:

Output Level

The total quantity of goods or services produced by a firm or industry within a specific period.

External Costs

Costs that are not borne by the producer or consumer of a good or service, but by third parties or society as a whole, such as pollution.

Market Outcome

The end result of market interactions, determined by supply and demand forces, affecting prices and quantities.

Efficient Price

A market price that fully reflects all available information and maximizes the total benefits to society.