Which of the Following Is Typically Used as the Basis

question 13

Multiple Choice

Which of the following is typically used as the basis of a market-based forecast?

• A)the currency's spot rate
• B)a time-series model showing the currency's moving average
• C)the currency's volatility index
• D)the currency's forward rate
• E)the currency's spot rate AND the currency's forward rate

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Definitions:

Required Return

The minimum rate of return an investor expects or requires from an investment to compensate for its level of risk.

Expected Dividend Yield

A forecasted annual percentage of return that comes from dividends paid by the stock, calculated by dividing the anticipated annual dividend by the current stock price.

Expected Growth Rate

The rate at which a company, investment, or economy is anticipated to grow over a specified period.

Constant Rate

This term refers to a fixed rate over a period of time, often used in the context of financial instruments with fixed interest rates.