Use the Following Information to Answer Questions 6-9

question 25

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 3-month forward yen was selling at a:

• A) 2.43% premium per annum against the dollar.
• B) 9.72% premium per annum against the dollar.
• C) 2.43% discount per annum against the dollar.
• D) 9.72% discount per annum against the dollar.

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Definitions:

Output

Output refers to the total amount of goods or services produced by a company, industry, or economy within a certain period, often used as a measure of productivity or economic activity.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, that sells goods or services in exchange for revenue.

Reduces

Makes smaller in amount, degree, or size; diminishes or lessens.

Perfectly Competitive

A market structure where many firms sell identical products, no single firm can influence the market price, and there are no barriers to entry or exit.