If E Is the Current Spot Rate (Units of Home

question 20

Multiple Choice

If e is the current spot rate (units of home currency per unit of foreign currency) , e_fwd is the current three-months forward rate, E(e) is the expected spot rate in three months, and xa is the expected rate of depreciation of the home currency in three months, then, in an efficient foreign exchange market,

• A) E(e) = e_fwd.
• B) e = e_fwd.
• C) xa = e_fwd.
• D) E(e) = e.

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Definitions:

Microelectrodes

Small electrodes used to record electrical activity from single neurons or to stimulate precise areas in the brain or nervous system.

Visual Cortex

The part of the cerebral cortex that receives and processes sensory nerve impulses from the eyes.

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Unique cells within the nervous system responsible for conveying data to additional nerve cells, muscles, or glands.

Patterns

Repetitive designs, arrangements, or sequences in data, objects, or events often signifying a trend or structure.