Suppose That the One-Year Forward Rate on Pounds Is $1 $\le$

question 45

Multiple Choice

Suppose that the one-year forward rate on pounds is $1.75/ $\le$ .Given no arbitrage opportunities,this implies that traders expect:

• A)the spot rate to be $1.75/\(\le\) in one year.
• B)the spot rate to be greater than $1.75/\(\le\) in one year.
• C)the spot rate to be less than $1.75/\(\le\) in one year.
• D)the spot rate to be greater than or equal to $1.75/\(\le\) in one year.
• E)the spot rate to be less than or equal to $1.75/\(\le\) in one year.

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Definitions:

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A painful and potentially serious condition caused by increased pressure within a muscle compartment, often leading to muscle and nerve damage.

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Ortolani Click

A clinical sign indicative of developmental dysplasia of the hip, detected by a clicking sound upon certain hip movements in infants.

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