If the Forward Rate Is an Unbiased Predictor of the Expected

question 56

Multiple Choice

If the forward rate is an unbiased predictor of the expected spot rate, which of the following is NOT true?

• A) The expected value of the future spot rate at time 2 equals the present forward rate for time 2 delivery, available now.
• B) The distribution of possible actual spot rates in the future is centered on the forward rate.
• C) The future spot rate will actually be equal to what the forward rate predicts.
• D) All of the above are true.

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Definitions:

Achievement-Oriented Leadership

A leadership style focused on setting challenging goals, emphasizing excellence, and showing confidence in followers' abilities to meet high standards.

Tangible Benefits

Material or measurable advantages that result from an action, decision, or policy, often involving financial gain or physical assets.

High-LPC Leaders

Refers to leaders categorized by the Contingency Theory of Leadership as having a high Least Preferred Co-worker score, indicating a people-oriented approach.

Fiedler's Contingency Theory

A leadership model proposing that effective leadership depends on a match between a leader’s style and the degree to which the situation gives the leader control and influence.