If a Foreign Country's Interest Rate Is Similar to the U.S

question 12

Multiple Choice

If a foreign country's interest rate is similar to the U.S. rate, the forward rate premium or discount will be ____, meaning that the forward rate and the spot rate will provide ____ forecasts.​

• A) ​substantial; similar
• B) ​substantial; very different
• C) ​close to zero; similar
• D) ​close to zero; very different

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Definitions:

Behavioral Contracting

A therapy technique where an agreement is made between two parties to promote a change in behavior.

Operant Conditioning

Operant conditioning is a method of learning that occurs through rewards and punishments for behavior, encouraging the occurrence of desired behaviors.

Systematic Desensitization

A therapeutic technique aimed at reducing anxiety through gradual exposure to the feared object or situation while using relaxation strategies.

Stepwise Regression

A statistical method of building a regression model by adding or removing predictors based on their statistical significance, in a step-by-step procedure.