Which of the Following Features Describe the Forward Market for Foreign

question 21

Multiple Choice

Which of the following features describe the forward market for foreign exchange?
I.Fixed contracts
II.Tailored size contracts
III.Fixed maturities
IV.Can be resold

• A) I only
• B) II only
• C) II and IV
• D) I, II, and IV

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Definitions:

Present Value

The current value of future monetary amounts or sequences of cash inflows, factoring in a specific rate of interest.

Annuity

A monetary tool that issues a predetermined sequence of payments to someone, commonly used to generate an income for those who have retired.

Earnings Rate

The rate at which a company or investment generates income relative to a specific amount of assets, capital, or equity.

Net Present Value

A calculation used to assess the profitability of an investment, considering the present value of its cash flows minus the initial investment cost.