Assume the Spot Exchange Rate Today Is C$1

question 44

Multiple Choice

Assume the spot exchange rate today is C$1.02 per $US,while the three-month forward rate is C$1.06 per $US.What will be the profit for an investor who takes a $US100,000 short position in the forward contract if the spot rate in three months equals 1.05?

• A) C$1,000
• B) - C$1,000
• C) C$4,000
• D) - C$4,000

---

Definitions:

GDP

Gross Domestic Product; a measure of the economic performance of a country, quantifying the total value of all goods and services produced over a specific time period.

Transmission Replacement

The process of removing a vehicle's failed transmission and installing a new or refurbished one to restore proper function.

Per Capita

A statistical measure that divides a total figure by the number of units in the population, often used to compare economic indicators across different countries or regions.

Real GDP

The measure of the value of economic output adjusted for price changes (inflation or deflation), reflecting the true value of goods and services produced.