Consider the Following If the Market Futures Price Is 1

question 52

Multiple Choice

Consider the following: $$\begin{array} { l l } \text { Risk-free rate in the United States } & 0.04 / \text { year } \\\text { Risk-free rate in Australia } & 0.03 / \text { year } \\\text { Spot exchange rate } & 1.67 \mathrm { AS } / \$\end{array}$$ If the market futures price is 1.69 A$/$, how could you arbitrage?

• A) Borrow Australian dollars in Australia, convert them to dollars, lend the proceeds in the United States, and . enter futures positions to purchase Australian dollars at the current futures price.
• B) Borrow U.S. dollars in the United States, convert them to Australian dollars, lend the proceeds in Australia, . and enter futures positions to sell Australian dollars at the current futures price.
• C) Borrow U.S. dollars in the United States, invest them in the U.S., and enter futures positions to purchase Australian dollars at the current futures price.
• D) Borrow Australian dollars in Australia and invest them there, then convert back to U.S. dollars at the spot price.
• E) There is no arbitrage opportunity.

Distinguish between biased and unbiased standard deviations.

Explore the strengths and limitations of using range as a measure of variability.

Understand the concept of central tendency and its importance in statistics.

Learn how to calculate and interpret the mean, median, and mode.

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Definitions:

Preconventional

A stage in moral development characterized by reasoning based on personal rewards and punishments.

Postconventional

A stage of moral development in which individuals make judgments based on universal principles and the rights of others rather than convention.

Moral Development

Refers to the processes through which individuals acquire and understand moral standards and behaviors.

Kohlberg

A psychologist known for his theory of moral development, which describes how moral reasoning matures through stages over a person's lifetime.