Assuming the 30-Day Forward Exchange Rate Were $1 = *30

question 9

Multiple Choice

Assuming the 30-day forward exchange rate were $1 = *30 and the spot exchange rate were $1 = *20,the dollar is selling at a _____ on the 30-day forward market.

• A)premium
• B)margin
• C)discount
• D)subsidy

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Definitions:

Normal Credit Balances

Accounts with a credit balance as expected in the accounting equation; for instance, liabilities, equity, and revenue accounts normally have credit balances.

Revenues

The total amount of money received by a company for goods sold or services provided during a certain period of time.

Net Income

The total profit of a company after all operating expenses, taxes, and interest are deducted from total revenue.

Normal Balance

The side of an account (debit or credit) that increases. For assets and expenses, it's usually the debit side, and for liabilities, equity, and revenue, it's typically the credit side.