Which of the Following Decisions Would Most Likely Rely on System

question 46

Multiple Choice

Which of the following decisions would most likely rely on System 1 thinking, rather than System 2 thinking?

• A) what to have for lunch
• B) what classes to take next term
• C) which bus route to take to a new location
• D) what to wear to an important interview

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Definitions:

Spot Rate

The ongoing market rate at which a certain currency is available for buying or selling for immediate dispatch.

Unbiased Forward Rate

Theoretically, a forward rate in the currencies market that is equal to the spot rate adjusted for interest rate differentials, without any prediction of future direction.

Forward Rate

The agreed-upon price for a financial transaction that will occur at a future date, often used in the context of foreign exchange or interest rates.

Spot Rate

The current market price of a currency, security, or commodity available for immediate settlement.