Assume a Currency Is Less Expensive in the Forward Market

question 36

Multiple Choice

Assume a currency is less expensive in the forward market than in the spot market relative to the U.S.dollar.When this occurs,the currency is said to be selling at

• A)the spot price.
• B)an arbitrage price.
• C)a premium relative to the dollar.
• D)its true relative value.
• E)a discount relative to the dollar.

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Definitions:

Deontology

An ethical theory that suggests actions should be judged moral or immoral based on rules, regardless of the outcomes those actions produce.

Framework For Ethics

A set of principles designed to guide the decision-making process by establishing standards of right and wrong.

Ethical Issue

A dilemma or situation that requires a person or organization to choose between alternatives that must be evaluated as right (ethical) or wrong (unethical).

Zero Tolerance Policy

A policy that enforces strict consequences for specific offenses, without exceptions.