Which One of the Following Is Correct If You Have

question 36

Multiple Choice

Which one of the following is correct if you have contracted to purchase 1,000 Swiss francs 3 months forward at a rate of CHF1.6 = USD1?

• A) You pay $625 today for the francs.
• B) You pay $1,600 today for the francs.
• C) You pay $625 three months from now for the francs.
• D) You pay $1,600 three months from now for the francs.

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Definitions:

Punitive Damages

Financial compensation awarded to a plaintiff that goes beyond what is necessary to compensate for losses and is intended to punish the defendant for egregious conduct.

Illegal Penalty

A punishment or consequence for an action that is not legally authorized or that exceeds the bounds set by legal statutes.

Power of Avoidance

The legal ability to declare a contract null and avoid its obligations due to reasons such as fraud, misrepresentation, or other substantive grounds.

Contractual Capacity

The lawful capacity of an individual to engage in a contract that is enforceable.