The SF/$ Spot Exchange Rate Is SF1

question 80

Multiple Choice

The SF/$ spot exchange rate is SF1.25/$ and the 180 day forward premium is 8 percent. What is the outright 180 day forward exchange rate?

• A)SF1.30/$
• B)SF1.35/$
• C)SF6.25/$
• D)None of the above

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Definitions:

Premium

The amount paid for an insurance policy or the extra cost above the normal price of a product or service, often associated with higher quality or benefits.

Insurance Companies

Businesses that protect their clients against financial losses from certain specified risks (death, accident, and theft, for example).