According to the Expectations Theory of Exchange Rates,what Change Is

question 88

Multiple Choice

According to the expectations theory of exchange rates,what change is expected in the future spot exchange rate if the forward rate trades at an 8% discount?

• A) The spot rate is expected to appreciate by 8%.
• B) The spot rate is expected to depreciate by 8%.
• C) The spot rate is expected to depreciate by 4%.
• D) No change is expected in the spot rate.

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Definitions:

Neutral Safety Switch

A safety switch located in the control circuit of a cranking system designed to prevent engine cranking when an automatic transmission is in gear.

Open Circuit

An electrical circuit that is not energized, that is, no current is flowing. The opposite to a closed circuit.

Park Range

A setting in automatic transmissions that locks the transmission, preventing the vehicle from moving.

Inductive Pick-up Clamp

a tool used to measure electrical parameters in a conductor without direct contact, commonly used in automotive diagnostics.