​If the Spot Rate of the Euro Increased Substantially Over

question 150

Multiple Choice

​If the spot rate of the euro increased substantially over a one-month period, the futures price on euros would likely ____ over that same period.

• A) ​increase slightly
• B) ​decrease substantially
• C) ​increase substantially
• D) ​stay the same

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Definitions:

Markov Model

A Markov Model is a mathematical system that undergoes transitions from one state to another on a state space. It is used for predicting the likelihood of future events based on current or past events.

Bullwhip Effect

When errors in estimating the supply of human capital are amplified along the supply chain, resulting in large overestimates of hiring needs.

Human Capital

The collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value.

Linear Programming

A complex mathematical procedure commonly used for project analysis in engineering and business applications; it can determine an optimum or best-supply mix solution to minimize costs or other constraints.