A Trader in Switzerland Just Agreed to Trade Swiss Francs

question 65

Multiple Choice

A trader in Switzerland just agreed to trade Swiss francs for British pounds based on today's exchange rate.The trade is expected to settle tomorrow.What term best describes this exchange?

• A)Arbitrage transaction
• B)Forward trade
• C)Spot trade
• D)Purchasing power parity
• E)Interest rate parity

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Definitions:

Total Assets

The sum of all resources owned by a company, valued according to accounting principles, including both current and non-current assets.

Current Position Analysis

A financial evaluation that assesses a company's current financial health, focusing on its ability to meet short-term obligations with its current assets.

Short-Term Creditors

Individuals or entities that have lent money to a company with the expectation that it will be repaid within a short timeframe, typically less than one year.

Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health and operational efficiency.