When a Currency Trades at a Discount in the Forward

question 72

Multiple Choice

When a currency trades at a discount in the forward market

• A)the forward rate is less than the spot rate.
• B)the forward rate is more than the spot rate.
• C)the forward exchange rate is less than one dollar .
• D)the exchange rate is less than it was yesterday.

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Definitions:

Delivery of Goods

The process of transporting goods from a seller to the buyer or the point at which the possession and risk of loss of the goods transfer from seller to buyer according to the terms of the contract.

Withdraw Repudiation

The act of one party withdrawing their previous refusal to fulfill their obligations under a contract.

Materially Changed

Refers to a significant alteration in the condition or content of a document, item, or agreement that affects its utility or value.

Obligations

Duties or responsibilities imposed by law, contract, or moral duty that require a party to act or refrain from acting in a certain way.