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Identify true statements about the forward and spot exchange rates. Assume that a U.S. company has a liability denominated in a foreign currency and enters
Identify true statements about the forward and spot exchange rates. Assume that a U.S. company has a liability denominated in a foreign currency and enters into a forward contract. Multiple select question. The forward rate on a given date is the same as the spot rate on the same date. The difference between the forward rate and the spot rate on a given date is called the spread. If the forward rate is less than the spot rate, the dollar is expected to strengthen against the foreign currency. If the forward rate is more than the spot rate, the dollar is expected to weaken against the foreign currency
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