As a Rule,when the Interest Rate of the Foreign Currency

question 79

Multiple Choice

As a rule,when the interest rate of the foreign currency is greater than the interest rate of the quoting currency,

• A)the outright forward rate is less than the spot exchange rate.
• B)the outright forward rate is more than the spot exchange rate.
• C)the currency will trade at a premium in the forward contract.
• D)none of the options

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Definitions:

Utilitarianism

A theory in normative ethics holding that the best action is the one that maximizes utility, often defined as maximizing happiness and reducing suffering.

Greatest Good

A concept often associated with utilitarianism, suggesting that actions are right if they benefit the majority, promoting the most happiness or least harm.

Laws

The system of rules that are created and enforced through social or governmental institutions to regulate behavior and maintain order in society.

Monroe Doctrine

A principle of United States foreign policy established in 1823, asserting that any intervention by external powers in the politics of the Americas is a potentially hostile act against the US.