Given the 3 Month Forward Rate Exchange Between the USA

question 71

Multiple Choice

Given the 3 month forward rate exchange between the USA and Switzerland is USD/CHF 1.1589 this suggests:

• A) that interest rates in the USA are higher than in Switzerland.
• B) the 3 month forward rate is at a premium.
• C) that interest rates in the USA are lower than in Switzerland.
• D) a person requires more data before making a conclusion.

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Definitions:

Balance

This term refers to the total amount of money in a financial account, the difference between credits and debits in an account, or the equilibrium between opposing forces or actions.

Construction Loan

A short-term loan used to finance the building of a home or another real estate project.

First Mortgage Bonds

Bonds that are secured by a first priority claim on a specific set of assets, usually property or real estate, in the event of the issuer's bankruptcy or default.

Working Capital Management

The management of a company's short-term assets and liabilities to ensure operational efficiency and financial stability.