Suppose That the 1-Year Forward Rate of Dollar Per Peso

question 49

Multiple Choice

Suppose that the 1-year forward rate of dollar per peso is $11.25,the current spot rate $/peso is $10.00,and the expected future spot rate $/peso is $11.50.The expected premium on the peso is:

• A) -2.5%
• B) 12.5%
• C) 15%
• D) 22.75%

---

Definitions:

Entrepreneurial Transition

The process or phase where an entrepreneur or business undergoes significant change, often towards growth or diversification.

Probable Crisis

A situation or a series of events that is likely to lead to an unstable and dangerous situation affecting an individual, group, community, or the whole society.

Ambiguous Roles

This concept involves roles within an organization or project that lack clear definitions, expectations, and parameters, leading to uncertainty.

Capital Asset Pricing Models

A theory that describes the relationship between systematic risk and expected return for assets, particularly stocks.