If a Foreign Currency Is Selling at a Discount Relative

question 26

Multiple Choice

If a foreign currency is selling at a discount relative to the dollar then the:

• A)foreign currency is cheaper in the spot market than it is in the forward market.
• B)cross rate is cheaper than the direct rate.
• C)foreign currency is cheaper in the forward market than it is in the spot market.
• D)direct rate is cheaper than the indirect rate.
• E)settled rate is less than the spot rate.

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