Historical Analysis of Recent Changes in Exchange Rates in Both

question 93

Multiple Choice

Historical analysis of recent changes in exchange rates in both the spot and futures markets for a given currency reveals that spot rates are thirty percent more sensitive than futures prices.Given this information,the hedge ratio for this currency is

• A)0.70.
• B)0.77.
• C)1.30.
• D)1.43.

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Definitions:

Psychological Theories

Principles formulated to understand and explain mental functions, behavior, and the dynamics of personality.

Universal Relevance

The quality of being significant or applicable in all situations, places, or times.

Meta-Theory

A theory about theories; it examines the structures, purposes, and methodologies of theories.

Obedience To Authority

The tendency of individuals to comply with orders or directives from someone in a position of power, regardless of personal ethics.