The Spot Exchange Rate for Canadian Dollar(C$) Is U

question 29

Multiple Choice

The spot exchange rate for Canadian Dollar(C$) is U.S.$0.68/C$.The six-month interest rate in U.S.is 2.5% and 3.0% in Canada.What is the six-month forward rate for Canadian Dollar?

• A)U.S.$0.6734/C$
• B)U.S.$0.6767/C$
• C)U.S.$0.6833/C$
• D)U.S.$0.6866/C$ forward rate = spot rate x

---

Definitions:

Direct Material

Raw materials that are consumed in the manufacturing process, directly incorporated into the finished product.

Variable Manufacturing Costs

Expenses that change in proportion to the manufacturing output, including costs related to direct labor, materials, and manufacturing overhead that fluctuates with production volume.

Operating Income

Earnings from a company's core business operations, excluding expenses and revenues from non-operating activities.

Fixed Overhead

The set costs associated with operating a business that does not change in relation to production volume, such as rent, salaries, and insurance.