The Current Spot Exchange Rate Is $1

question 54

Multiple Choice

The current spot exchange rate is $1.55/€ and the three-month forward rate is $1.50/€.You enter into a short position on €1,000.At maturity,the spot exchange rate is $1.60/€.How much have you made or lost?

• A)Lost $100
• B)Made €100
• C)Lost $50
• D)Made $150

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Definitions:

Relative Frequencies

The proportion of occurrences of a specific value relative to the aggregate count of observations, frequently shown as a percentage.

Sample Size

The number of observations or data points collected in a study or used in a statistical analysis.

Vertical Axis

The perpendicular line in a graph or chart representing the range of one of the variables under consideration.

Horizontal Axis

The x-axis in a graph, typically used to represent the independent variable or scale of measurement.