According to the Expectations Theory of Exchange Rates,what Change Is

question 92

Multiple Choice

According to the expectations theory of exchange rates,what change is expected in the future spot exchange rate if the current spot rate is 8% lower than the forward exchange rate?

• A) Future spot rate is expected to increase by 8%.
• B) Future spot rate is expected to decrease by 8%.
• C) Future spot rate is expected to decrease by 4%.
• D) No change is expected in the future spot rate.

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