If the Foreign Exchange Market Is Efficient,forward Exchange Rates Should

question 122

Multiple Choice

If the foreign exchange market is efficient,forward exchange rates should be unbiased predictors of future spot rates.This means that;

• A)the predictions will be accurate in any specific situation.
• B)inaccuracies will not be consistently above or below future spot rates;they will be random.
• C)more accurate predictions of future spot rates can be calculated from publicly available information.
• D)market participants' collective predictions about future spot rates cannot be incorrect.

---

Definitions:

Penny-Pinching Techniques

Strategies and methods focused on reducing expenses and conserving financial resources in a cost-effective manner.

Earned Income

The revenue generated by a nonprofit organization through the sale of goods and services, as opposed to funding received through donations or grants.

Sensitivity Analysis

A financial modeling technique used to determine how different values of an independent variable affect a particular dependent variable under a given set of assumptions.

Sponsorship Relationship

Describes the formal alliance between an entity, typically a corporation, and another party, often in events, nonprofits, or sports, where each provides mutual benefits to the other.