The Spot and 12-Month Forward Rates in Dollar Per Yen $\times$

question 57

Multiple Choice

The spot and 12-month forward rates in dollar per yen are C$0.011868 = $\times$ 1 and C$0.012185, respectively. The forward rate for the Canadian dollar is selling at a _________ to the spot rate.

• A) Premium of 2.67%
• B) Premium of 7.62%
• C) Discount of 2.67%
• D) Discount of 7.62
• E) None of the above

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Definitions:

Methodological Approach

A specific way or strategy of conducting research or investigation in order to answer questions or solve problems, often involving specific techniques or procedures.

Evolutionary Perspective

A theoretical approach that examines how evolutionary processes, such as natural selection, shape behaviors, physical traits, and social systems.

Circular Reasoning

A logical fallacy in which the conclusion of an argument is assumed in one of the premises, offering no real evidence for the claim.

Social Psychology

The academic examination of the ways in which the real, perceived, or suggested presence of others affects individuals' mental processes, emotions, and actions.