Multiple Choice
Why do spot exchange rates and forward rates differ?
A) Because forward rates reflect the expectations of the foreign exchange market about future currency movements
B) Because of the imbalance between demand and supply for the currency in the spot exchange market
C) Because of the volatility inherent in foreign exchange markets
D) Because forward rates,by definition,should sell either at a premium or a discount
Correct Answer:
Verified
Correct Answer:
Verified
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