Two Methods for Assessing Exchange Rate Volatility Are to Use

question 62

True/False

Two methods for assessing exchange rate volatility are to use the volatility of historical exchange rate movements and to derive the exchange rate's implied standard deviation from the currency option pricing model.

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Definitions:

Displacement

in psychology, refers to the unconscious transfer of an intense emotion from its original object to another one.

Aggressive Impulses

Innate or instinctual drives that lead to aggressive behaviors, which can stem from frustration or perceived threats.

Defense Mechanism

Unconscious psychological strategies used by individuals to cope with reality and maintain self-image.

Reaction Formation

A defense mechanism in which unacceptable thoughts or desires are expressed as their opposites, often to hide one's true feelings.