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:

Theory

A system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained.

Mind And Body

The concept concerning the relationship and dual nature of the mental and physical aspects of human beings.

Libertarians

One term for persons who hold the metaphysical view that our apparently free choices actually are free. This term is also used for those who adopt the political position of libertarianism.

Determinism

The view that every event in the universe is dependent upon other events that are its causes. In this view, all human actions and decisions, even those we would normally describe as free and undetermined, are totally dependent on prior events that cause them.