Which Equation Is Used to Define the Futures Price?
A) $\frac { F ( \$ / € ) } { S ( \$ / € ) }$

question 34

Multiple Choice

Which equation is used to define the futures price?

• A) \(\frac { F ( \$ / € ) } { S ( \$ / € ) }\) = \(\frac { 1 + i_{\$} } { 1 + i _{\€}}\)
• B) \(\frac { F ( \$ / € ) } { S ( \$ / € ) }\) = \(\frac { 1 + i } { 1 + i }\)
• C) \(\frac { F ( \$ / € ) - S ( \$ / € ) } { S ( \$ / € ) }\) = \(\frac { 1 + i_{\$} } { 1 + i_{€} }\)
• D)F($ / €)- S($ / €)= \(\ddot { l } _ { S }\) - \(i _ { \epsilon }\)

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Definitions:

Dividend

A portion of a company's earnings that is paid to shareholders, usually on a regular basis.

Nominal Rate

The officially declared or promoted rate of interest for a loan or investment, excluding the effects of compounding or any associated fees.

Loan

A borrowed sum of money that is expected to be paid back with interest.

Investment

Distributing capital or resources with the goal of achieving financial gain or income.