Suppose That If No Other Information Is Available, What Will Your Guess

question 102

Multiple Choice

Suppose that: $$\begin{array}{l}\begin{array} {lll } \text {U.K. (pound) }&\frac { \text { Spot Rate } } { 1.5331 }&\frac { 3 \text { Month Forward Rate } } { 1.5372 }&\frac { 1 \text { Year Forward Rate } } { 1.5502 }\end{array}\end{array}$$ If no other information is available, what will your guess about the spot rate in one year be?

• A)1.5331
• B)1.5372
• C)1.5502
• D)2.0000

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Definitions:

Adopted Children

Children who have been legally taken by individuals or couples to be cared for as their own.

Identical Twins

Twins who develop from a single fertilized egg that splits and forms two embryos, sharing 100% of their DNA.

Nonidentical Twins

Twins born from two separate eggs fertilized at the same time, leading to siblings that share genetic similarities but are not genetically identical.

Biological Siblings

Siblings who share the same biological parents, fully related genetically.