题目内容

Consider the following information to answer question 11 – 13.Assume the following: (1) the interest rate on 6-month treasury bills is 8% per annum in the United Kingdom and 4% per annum in the United States; (2) today's spot price of the pound is $1.50, while the 6-month forward price of the pound is $1.485.By investing in U.K. treasury bills rather than U.S. treasury bills, and not covering exchange rate risk, U.S. investors earn an extra return of .

A. 4% per year, 1% for the 6 month
B. 4% per year, 2% for the 6 months
C. 2% per year, 0.5% for the 6 months
D. 2% per year, 1% for the 6 months

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Foreign currency options are available both over-the-counter and on organized exchanges.

In the forward market, the exchange rate is agreed on at the time of the currency contract, but payment is not made until the future delivery of the currency actually takes place.

Foreign-exchange brokers help commercial banks carry out foreign exchange trading and maintain desired balances of foreign exchange.

Similar to stock and commodity exchanges, the foreign exchange market is an organized structure with a central meeting place and formal licensing requirements.