Spot Rate: Given That the Spot Rate Is ¥106

question 58

Multiple Choice

Spot rate: Given that the spot rate is ¥106.74/$ and the 180-day forward quote is ¥100.37/$, we can say that

• A) the U.S. dollar is at a forward premium against the yen.
• B) the yen is at a forward premium against the U.S. dollar.
• C) the yen is at a forward discount against the U.S. dollar.
• D) the dollar is at neither a premium nor a discount against the yen.

---

Definitions:

Input

Resources used in the production of goods and services.

Output

The total amount of goods or services produced by an individual or entity in a given period.

Function

In mathematics, a relation or expression involving one or more variables, where each input value yields one and only one output value.

Production Function

A mathematical model that describes the relationship between the quantity of output produced and the quantities of inputs used in production.