Suppose That the Interbank Forward Bid for March 20 on Swiss

question 7

Multiple Choice

Suppose that the interbank forward bid for March 20 on Swiss francs is $0.7827 at the same time that the price of IMM Swiss franc futures for delivery on March 20 is $0.779How much of an arbitrage profit could a dealer earn per March Swiss franc futures contract of SFr 125,000?

• A) $400
• B) $68
• C) $215
• D) $58

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Definitions:

Debenture Bond

A type of debt instrument not secured by physical assets or collateral but backed only by the issuer's creditworthiness and general reputation.

Unsecured Bond

A bond that is not backed by collateral or specific assets and is solely based on the issuer's creditworthiness.

Face Value

The nominal or original value of a security or currency as stated by the issuer, not necessarily its market value.

Credit Rating

An assessment of the creditworthiness of a borrower, either a business or a governmental entity, reflecting their ability to repay borrowed money.