Which Equation Is Used to Define the Futures Price?
A) $\frac { F ( \$ / € ) } { S ( \$ / € ) } = \frac { 1 + i _ { \$ } } { 1 + i _ { € } }$

question 63

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) \(F ( \$ / € ) - S ( \$ / € ) = i _ { \$ } - i _ { € }\)

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Definitions:

Interest

The cost of borrowing money, represented as a percentage of the principal, paid by the borrower to the lender for the use of the funds.

Interest Paid

The total amount of interest expense that a borrower has paid to lenders during a specific period, reflecting the cost of borrowing money.

Bonds Issued

Debt securities sold by corporations or governments to raise funds, to be repaid at a future date.

Capital Lease

A contractual arrangement that transfers substantially all the benefits and risks of ownership to the lessee so that the lease is in effect a purchase of the property.