David Estimated a Six-Month Forward Rate of C$1

question 40

Multiple Choice

David estimated a six-month forward rate of C$1.01 per US$.The six-month US$ interest rate is currently 4%.If David's estimate is based on Interest Rate Parity, what was the observed current six-month Canadian interest rate, if the spot rate is C$1.02 per US$?

• A)5.03%
• B)2.03%
• C)2.98%
• D)2.05%

Understand the impact of stock transactions such as stock splits and reverse stock splits on market price, liquidity, and shareholder value.

Comprehend the reasons and implications of different dividend policies and practices.

Identify the significance of flotation costs on a firm's financial strategies.

Recognize the rights and entitlements of shareholders in relation to dividend distributions.

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Definitions:

Exponential Smoothing Constant

A parameter in exponential smoothing methods for forecasting that controls the degree to which recent observations are weighted more heavily than older observations.

Exponential Smoothing Model

A time series forecasting method that applies weighted averages of past observations, giving greater weight to more recent data, to predict future values.

Mean Absolute Percentage Error

A measure used to evaluate the accuracy of forecasting models, expressing the average absolute percent error between predicted and observed values.

Sales Details

Specific pieces of information related to the transactions of sales, including quantities sold, prices, dates, and customer data.