Suppose That the Value of a Forward Contract That You

question 5

Multiple Choice

Suppose that the value of a forward contract that you were holding for the last six months is $50 today.It matures in three more months.If today's spot price is $97 and the underlying simple interest rate is 5 percent per year,what was the forward price negotiated when you purchased the contract six months back?

• A) $15.57
• B) $38.76
• C) $47.59
• D) $50.63
• E) None of these answers are correct.

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Definitions:

Aptitude Test

A type of ability test that measures what one is capable of doing. It includes intelligence tests, neuropsychological assessments, cognitive ability tests, special aptitude tests, and multiple aptitude tests.

Subtests

Components or sections of a larger test, each focusing on a specific area of skill or knowledge within the overall assessment.

Intercorrelations

Statistical measures that indicate the strength and direction of relationships between multiple variables.

Factor Analysis Validity

Factor Analysis Validity involves using factor analysis, a statistical method, to identify the underlying structure of psychological constructs, thus helping to validate the content of a test.