Spot exchange rate is 0.7000 Canadian dollars for one Mongolian tugrik and the six-month Canadian and Mongolian risk-free interest rates are 5% and 7% (both expressed with continuous compounding). What is the six-month forward rate? A) 0.7070 B) 0.7177 C) 0.6930 D) 0.6861 As the dividend yield decreases, which of the following is true? The one-year futures price as a percentage of the spot price increases The one-year futures price as a percentage of the spot price decreases C) The one-year futures price as a percentage of the spot price stays the same D) Any of the above can happen What is the 3-month forward rate 6 months from now based on the rates provided below: A) 1.75% B) 6% C) 7% D) 14% A long forward contract that was negotiated some time ago will expire in three months and has a delivery price of $20. The current forward price for three-month forward contract is $21. The three month risk-free interest rate is 8%. What to the nearest cent is the value of the short forward contract? A) -$1.85 B) $2.00 C) -$0.98 D) $0.98 The spot price of an asset is strongly negatively correlated with the interest rates. Which of the following would you expect to be true? A) The forward price equals the expected futures price B) The forward price is less than the expected futures price C) forward price is greater than the expected futures price D) The forward price is sometimes greater and sometimes less than the expected futures price