Suppose That the 1-Year Forward Rate of Dollar Per Swiss

question 4

Multiple Choice

Suppose that the 1-year forward rate of dollar per Swiss franc is $0.42,the current spot rate $/SFr is $0.40,and the expected future spot rate $/SFr is $0.45.The risk premium equals to:

• A) - 7.5%
• B) 5%
• C) 6.67%
• D) 12.5%

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Definitions:

Costly Medical

Refers to healthcare services or treatments that entail high expenses, often leading to financial strains for individuals or healthcare systems.

Median Household Income

The middle income value when all the households in a given area are arranged from lowest to highest income; half of households earn more and half earn less than this amount.

Household Income

The combined gross income of all members of a household, usually measured annually, that is available for spending or saving.

Poverty Rates

Measures the proportion of the population living below the poverty line, reflecting the general state of economic deprivation in a society.