If the One-Year Forward Rate for the Dollar Is 0

question 2

Multiple Choice

If the one-year forward rate for the dollar is 0.80 euro, while the current spot rate is 0.82 euro, the expected percentage change in the euro is ____% to the nearest percentage.

• A) 0.03
• B) 0.02
• C) -0.02
• D) None of the above

---

Definitions:

Incongruence

A psychological state characterized by a discrepancy between an individual's self-perception and their actual experience, leading to discomfort and anxiety.

Self-Concept

An individual’s understanding and evaluation of their own behaviors, attributes, and attitudes, which forms a coherent picture of who they are.

Actual Experience

The direct and personal involvement or participation in events or activities.

Conditional Affection

Conditional affection is an emotional response or feeling of love that is dependent on the other person meeting certain conditions or expectations.