Which of the following statement is NOT true regarding the spot rate and forward rate? a. Forward rate can be calculated using the spot rate, the interest rate for domestic investment, and the foreign investment interest rate. b. Forward rate should be higher than the spot rate at the beginning of a forward contract. c. Forward rate is the rate of exchange at a future point in time. d. Spot rate is the current rate of exchange.
Which of the following statement is NOT true regarding the spot rate and forward rate? a. Forward rate can be calculated using the spot rate, the interest rate for domestic investment, and the foreign investment interest rate. b. Forward rate should be higher than the spot rate at the beginning of a forward contract. c. Forward rate is the rate of exchange at a future point in time. d. Spot rate is the current rate of exchange.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which of the following statement is NOT true regarding the spot rate and forward rate?
a. Forward rate can be calculated using the spot rate, the interest rate for domestic investment, and the foreign investment interest rate.
b. Forward rate should be higher than the spot rate at the beginning of a forward contract.
c. Forward rate is the rate of exchange at a future point in time.
d. Spot rate is the current rate of exchange.
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