Suppose You Observe a Spot Exchange Rate of $2

question 80

Multiple Choice

Suppose you observe a spot exchange rate of $2.00/£.If interest rates are 5 percent APR in the U.S.and 2 percent APR in the U.K.,what is the no-arbitrage 1-year forward rate?

• A)£2.0588/$
• B)$2.0588/£
• C)£1.9429/$
• D)$1.9429/£

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Definitions:

Cost-Responsiveness Efficient Frontier

A concept in supply chain management indicating the optimal point where the cost of providing a certain level of responsiveness is minimized.

Supply Chain Efficiency

The optimization of a company's supply-side activities to maximize customer value and gain a competitive advantage in the market.

Responsiveness Spectrum

Describes the range of a company's ability to respond to changes in demand, supply chain disruptions, and market trends quickly and effectively.

Zone of Strategic Fit

A concept in supply chain management that emphasizes the alignment between the supply chain strategy and the competitive strategy of the company.