An Exchange Rate Is 0

question 18

Multiple Choice

An exchange rate is 0.7000 and the six-month domestic and foreign risk-free interest rates are 5% and 7% (both expressed with continuous compounding) .What is the six-month forward rate?

• A) 0.7070
• B) 0.7177
• C) 0.7249
• D) 0.6930

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Definitions:

Negative Punishment

A behavioral psychology concept where reducing or removing a desirable stimulus follows an unwanted behavior, aiming to decrease that behavior's frequency.

Behaviorist Movement

A movement in psychology that focuses on observable behaviors, avoiding theories about mental processes, and emphasizes the environmental impacts on a subject's behavior.

Test-Retest Reliability

The consistency of a measure evaluated over time, ensuring that the same results are achieved under the same conditions on subsequent administrations.

Personality Theories

The study of the development, structure, and dynamics of personality.