A Currency Is at a ________ When Its Interest Rate

question 57

Multiple Choice

A currency is at a ________ when its interest rate is ________ than the interest rate in the other country.

• A) Forward flat, lower
• B) Forward discount, lower
• C) Forward flat, higher
• D) Forward premium, lower

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Definitions:

Operating Income

Income from a company's main business activities, excluding expenses such as interest and taxes.

Fixed Costs

Costs that do not vary with production volume, such as rent, salaries, and insurance premiums.

Sales Mix

Refers to the combination of different products or services that a company offers, influencing overall sales and profitability.

Unit Contribution Margin

The difference between the selling price per unit and the variable costs per unit, representing how much each unit sold contributes to covering fixed costs and generating profit.