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:

Subcutaneous Tissue

The layer of tissue directly under the skin, consisting of loose connective tissue and fat, providing insulation and energy storage.

Subcutaneous Layer

The innermost layer of the skin, consisting of fat and connective tissues, that provides insulation and cushioning to the body.

Stratum Corneum

The outermost layer of the epidermis, consisting of dead cells that provide a barrier to infection and reduce water loss.

Melanin Production

The biological process responsible for the generation of melanin, a pigment that determines the color of skin, hair, and eyes.