One Way to Infer Future Currency Volatility Is to Consider

question 45

Multiple Choice

One way to infer future currency volatility is to consider:

• A)the spot rate of the currency since it incorporates all information known about the currency.
• B)currency option prices since they estimate future currency volatility rather than report past currency volatility.
• C)the history of the volatility of the currency since that suggests the future of the currency.
• D)how currency volatility has affected the firm in the past.

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Definitions:

Used Equipment

Pre-owned machinery or technology that may be purchased for business operations at a lower cost compared to new items.

Average Tax Rate

The percentage of total income that is paid in taxes, calculated by dividing the total tax paid by the taxpayer's total income.

Interest Income

Earnings received from deposit accounts or investments through the payment of interest.

Eligible Dividends

Dividends that are designated by a corporation to be eligible for a lower tax rate for the receiver, depending on jurisdiction.