The Main Purpose in Contracting to Purchase Foreign Currency in the Forward

question 40

Multiple Choice

The main purpose in contracting to purchase foreign currency in the forward market is to:

• A) earn a premium (interest) on the exchange.
• B) lock into a price now.
• C) take advantage of future price reductions.
• D) avoid the more expensive spot rates.

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Definitions:

Placenta

An organ that develops in the uterus during pregnancy, providing oxygen and nutrients to the growing fetus while removing waste products.

Embryo

An early stage of development in many animals, including humans, when it is in the uterus or egg, characterized by rapid cell division and differentiation.

Viruses

Microscopic infectious agents that replicate only inside the living cells of an organism, capable of causing diseases in humans, animals, and plants.

Adolescence

The transitional stage of physical and psychological development that occurs between childhood and adulthood.