The Difference Between the Forward Rate and the Spot Rate

question 20

Multiple Choice

The difference between the forward rate and the spot rate is called the

• A) cross exchange rate.
• B) forward premium or forward discount.
• C) indirect quote.
• D) None of the above.

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Definitions:

Logical

Pertaining to the use of reason and clear thinking, often involving the systematic process of inference or deduction.

Stealing

The act of taking someone else's property without permission or legal right and with no intention to return it.

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The combination of characteristics or qualities that form an individual's distinctive character, influencing behaviors, thoughts, and emotions.

Reciprocal Determinism

A concept in psychology that suggests individual behavior, environment, and cognition are interrelated and influence each other.