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Question 21 Which of the following statements is incorrect? Eurocredit loans are made by small banks with variable maturities rates of interest that is tied
Question 21 Which of the following statements is incorrect? Eurocredit loans are made by small banks with variable maturities rates of interest that is tied to a base equity rate such as CAPM. The forward rate is what you agree to pay for the currency in the future by signing a contract today to buy the currency on a date in the future. All the answers are correct except one. Foreign exchange equilibrium occurs at the price at which the quantity of the currency demanded exactly equals the quantity supplied. Given that the spot rate is $1.5136/ and the 90-day forward quote is $1.4974/, we can say that the U.S. dollar is expected to appreciate against the Euro in the future
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