You Checked the €/$ Exchange Rate Today and You Found

question 78

Multiple Choice

You checked the €/$ exchange rate today and you found that one Dollar cost you €0.8214.When you checked the three months (90 day) €/$ forward exchange rate one dollar was trading at €0.8026.What is the annualized forward premium (discount) for the Euro?

• A) 9.4%
• B) -9.4%
• C) 2.35%
• D) -2.35%

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Definitions:

Portion

A part or section of a whole, often expressed as a fraction or percentage.

Complete

To finish or make whole; in mathematics, often refers to making a square in quadratic equations or filling in missing parts of an expression or equation.

Acid Solution

A aqueous solution containing more hydrogen ions (H+) than hydroxide ions (OH-), typically having a pH less than 7.

Quarts

A unit of liquid measure equal to two pints or one fourth of a gallon, used especially in the US.