Assuming the 30-Day Forward Exchange Rate Was $1 = 130

question 8

Multiple Choice

Assuming the 30-day forward exchange rate was $1 = 130 and the spot exchange rate was $1 = ×120, the dollar is selling at a ________ on the 30-day forward market.

• A) premium
• B) margin
• C) discount
• D) subsidy

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Definitions:

Nuts

Hard-shelled seeds of certain plants that are edible and often rich in nutrients such as fats, proteins, and carbohydrates.

Homothetic Preferences

Preferences where if a consumer prefers a bundle of goods A to B, they will also prefer a proportional scaling of A to the same proportional scaling of B, indicating consistent patterns of consumption regardless of income level.

Income

Earnings accumulated, often on a consistent schedule, from employment or investment gains.

Books

Physical or digital publications consisting of written, printed, or illustrated work.