If an Investor Can Obtain More of a Foreign Currency

question 47

True/False

If an investor can obtain more of a foreign currency for a dollar in the forward market than in the spot market, then the forward currency is said to be selling at a discount to the spot rate.

---

Definitions:

Cause and Effect

The principle that an action or event will produce a certain response or outcome (effect) directly attributable to that action or event (cause).

Introspection

The examination of one's own thoughts and feelings as a way of gaining insight into one's mind and character.

Wilhelm Wundt

Considered the father of modern psychology, he established the first psychological laboratory in 1879, laying the foundations for experimental psychology.

Correlation

An association or a relationship among variables, as we might find between height and weight, or between study habits and school grades.