Assume the Current Spot Price Is $1

question 88

Multiple Choice

Assume the current spot price is $1.62/₤ and the 3-month forward rate is $1.64/₤. Which one of these statements is correct given these rates?

• A) The pound is selling at a premium relative to the dollar.
• B) The real interest rate in the U.S. is higher than the real rate in the U.K.
• C) The dollar is expected to appreciate.
• D)The dollar is selling at a premium relative to the pound.

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Definitions:

Twisted Protein Fibers

Abnormally shaped protein strands that can accumulate in cells, often associated with neurodegenerative diseases such as Alzheimer's.

Alzheimer's Disease

A progressive neurodegenerative disease characterized by memory loss, cognitive impairment, and functional decline.

Hippocampus

A major component of the brain, vital for memory formation and spatial navigation, located within the temporal lobe.

Memory

The cognitive process of encoding, storing, and retrieving information.