If the Futures Rate Is Above the Forward Rate, Actions

question 93

True/False

If the futures rate is above the forward rate, actions by rational investors would put upward pressure on the forward rate and downward pressure on the futures rate.

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Definitions:

Order Placed

The action taken by a buyer to request goods or services from a supplier.

Aggregate Planning

A process in procurement and production planning aimed at determining necessary capacity and resources to meet anticipated demand.

Transforms Forecasts

Involves using mathematical transformations on historical data to make future predictions.

Projected Demand

An estimate of the future demand for a product or service, based on historical data, market trends, and forecasting techniques.