The SF/$ Spot Exchange Rate Is 1

question 28

Multiple Choice

The SF/$ spot exchange rate is 1.25 and the 180 forward exchange rate is 1.30.Assuming 360 days in a year,the forward premium (discount) is:

• A) The dollar is trading at an 8% premium to the Swiss franc for delivery in 180 days.
• B) The dollar is trading at a 4% premium to the Swiss franc for delivery in 180 days.
• C) The dollar is trading at an 8% discount to the Swiss franc for delivery in 180 days.
• D) The dollar is trading at a 4% discount to the Swiss franc for delivery in 180 days.

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Definitions:

Warranty Of Merchantability

assures that a product sold by a merchant is fit for the general purpose for which it is sold, meeting a buyer's reasonable expectations.

Conspicuous

Something easily seen or noticed; clearly visible or attracting attention due to its distinctiveness.

Strict Liability

A legal doctrine that holds a party responsible for their actions or products, without the plaintiff having to prove negligence or fault.

Unreasonably Dangerous

A legal term describing a product or condition that poses a significant risk of harm to people or property.