Which of the Following Instances Indicates That the Dollar Is

question 137

Multiple Choice

Which of the following instances indicates that the dollar is selling at a premium on the 30-day forward market?

• A) When the spot exchange rate is currently $1 = ¥120 and changes to $1 = ¥130 after 30 days
• B) When the spot exchange rate is currently $1 = ¥120 and changes to $1 = ¥110 after 30 days
• C) When the current spot exchange rate is $1 = ¥120 and the 30-day forward rate is $1 = ¥110 after 30 days
• D) When the current spot exchange rate is $1 = ¥120 and the 30-day forward rate is $1 = ¥130 after 30 days
• E) When the current spot exchange rate is $1 = ¥120 and the 30-day forward rate is $1 = ¥120

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Definitions:

α

In statistics, α (alpha) typically denotes the level of significance, the probability of rejecting the null hypothesis when it is true.

Df

Short for degrees of freedom, referring to the number of independent pieces of information remaining after estimating one or more parameters.

Y-Intercept

The point where a line crosses the y-axis on a graph, indicating the value of y when x equals zero.

Regression Equation

A mathematical formula used to predict the value of a dependent variable based on one or more independent variables.