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Question
Assume that a buyer of Italian wine saw the following quotes: spot rate of .75 euros to the U.S. dollar; 30-day forward rate of .747 euros to the U.S. dollar; 90-day forward rate of .744 euros to the U.S. dollar. What does this information imply?A) The forward euro is selling at a premium as compared with the spot euro.
B) The dollar is expected to maintain the same value in the near future relative to the euro.
C) The forward euro is selling at a discount as compared with the spot euro.
D) None of the above.
Answer
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Related questions
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The equivalent annual cost method is most appropriate in which of the following situations? In each case, assume that several mutually exclusive options are available.
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