In the Absence of Transactions Costs,for the Same Maturity and Currency

question 5

Multiple Choice

In the absence of transactions costs,for the same maturity and currency

• A)The futures price is always higher than the forward rate
• B)The forward rate is always higher than the futures price
• C)The futures price and the forward rate are the same
• D)The futures price and the forward rate are not related

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Definitions:

Minority Group

A subgroup of people who, based on physical or cultural traits, are differentiated from and less powerful than the dominant group in a society.

Token

A piece that represents something else, such as a coin representing monetary value or a symbol representing an idea or quality.

Lower Self-Esteem

Refers to a lower regard for one’s own worth or value.

Frustration-Aggression Hypothesis

A theory suggesting that aggression is often the result of frustration caused by blocked goals.