Differences in the spot exchange rate and the 30-day forward rate are normal and reflect the expectations of the foreign exchange market about
A) anticipated currency swap rates.
B) stability in the global marketplace.
C) future currency movements.
D) the carry trades that will occur.

Question

Quizplus · Accepted Answer

Such differences are normal; they reflect the expectations of the foreign exchange market about future currency movements.

Differences in the Spot Exchange Rate and the 30-Day Forward