The Six-Month Forward Quote for German Mark Is DM1

question 102

Multiple Choice

The six-month forward quote for German mark is DM1.6/US$, and the spot price of German mark is DM1.7/US$.Which of the following statements is true?

• A)Forward discount on German mark is 6.25%
• B)Forward premium on German mark is 6.25%
• C)Forward discount on US$ is 6.25%
• D)Forward premium on US$ is 6.25% forward premium =

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Definitions:

Psychological Consequences

The effects or outcomes on an individual's mental and emotional state due to certain events or conditions.

Behavioural

Related to the actions or reactions of individuals or groups in response to external or internal stimuli.

Physiological

Relating to the functions of living organisms and their parts.

Stress Episode

A single or series of stressful events that disrupt an individual's emotional equilibrium and may lead to a physical or psychological response.