A US Firm Plans to Borrow Swiss Francs Today for a a One-Year

question 31

Multiple Choice

A U.S. firm plans to borrow Swiss francs today for a one-year period. The Swiss interest rate is 9%. It uses today's spot rate as a forecast for the franc's spot rate in one year. The U.S. one-year interest rate is 10%. The expected effective financing rate on Swiss francs is:

• A) equal to the U.S. interest rate.
• B) less than the U.S. interest rate, but more than the Swiss interest rate.
• C) equal to the Swiss interest rate.
• D) less than the Swiss interest rate.
• E) more than the U.S. interest rate.

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Definitions:

Unilateral Neglect

A neurological condition in which a person is unaware of one side of their body or environment.

Disturbed Sensory Perception

A condition where an individual has difficulty processing or interpreting sensory information, leading to confusion or disorientation.

Peripheral Vascular Dysfunction

Disorders affecting the blood vessels outside of the heart and brain, potentially leading to reduced blood flow and associated health issues.

Acute Confusion

A sudden onset of disorientation or impaired consciousness, often reflecting an underlying medical, neurological, or psychiatric condition.