Use the Following Information to Answer Questions 6-9

question 6

Multiple Choice

Use the following information to answer questions 6-9.
Table 6.1: Spot and Forward Exchange Rates on May 5, 2012.

-Refer to Table 6.1.On May 5,2012,the 1-year forward yen was selling at a:

• A) 3.56% premium per annum against the dollar.
• B) 3.69% premium per annum against the dollar.
• C) 3.56% discount per annum against the dollar.
• D) 3.69% discount per annum against the dollar.

---

Definitions:

Withholding Allowances

Allowances claimed on employment forms determining the amount of federal income tax withheld from a paycheck.

Federal Withholding

The portion of an employee's wages that is withheld by the employer for the purpose of paying federal income taxes.

Supplemental Wages

Additional compensation received beyond one's regular wages, such as bonuses, commissions, or overtime pay, often subject to different tax withholding rates.

FICA Taxes

Taxes levied on both employees and employers to fund Social Security and Medicare.