What Was the Annualized Forward Premium on the Pound If

question 54

Multiple Choice

What was the annualized forward premium on the pound if the spot rate on May 6, 2011 was £0.6102/$ and the 180 day forward rate was £0.5836/$?

• A) 8.72%
• B) 9.12%
• C) 4.56%
• D) 18.23%

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Definitions:

Allocation

Allocation involves distributing or assigning costs, resources, or revenues among various accounts, departments, or products based on specific criteria or formulas.

Journal Entry

A record in accounting that represents the recording of a financial transaction, consisting of debits and credits that must balance.

Manufacturing Overhead Costs

Indirect costs related to manufacturing, including costs associated with operating the factory outside of direct materials and labor.

Machine-Hours

The total operational hours of machinery used in the production process, often used as a basis for allocating manufacturing overhead costs.