CFA Practice Question

There are 341 practice questions for this study session.

CFA Practice Question

If the one-month exchange rate $:€ is 0.7928-30, this implies that the bank is willing to commit itself today to ______
A. sell dollars in one month for €0.7928 or to buy them for €0.7930.
B. buy dollars in one month for €0.7928 or to sell them for €0.7930.
C. buy dollars for €0.7928 or to sell them for €0.7930.
Explanation: In a forward, or futures, contract, a commitment is irrevocably made on the transaction date, but delivery takes place later, here a month later. The bid-ask quotation here implies that the bank is willing to commit itself today to buy dollars in one month for €0.7928 or to sell them for €0.7930.

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