The Unbiased Forward Rate Is A

question 7

Multiple Choice

The unbiased forward rate is a:

• A)condition where a future spot rate is equal to the current spot rate.
• B)guarantee of a future spot rate at one point in time.
• C)condition where the spot rate is expected to remain constant over a period of time.
• D)relationship between the future spot rate of two currencies at an equivalent point in time.
• E)predictor of the future spot rate at the equivalent point in time.

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Definitions:

Output Units

Output units refer to the individual units of product or service produced by a business or economic system.

Purely Competitive Seller

A seller in a market where there are many buyers and sellers, with no single entity able to control the market price.

Average Variable Cost

The total variable cost of production divided by the quantity of output produced; it decreases and then increases as output increases due to economies and diseconomies of scale.

Economic Profit

The extra income a business makes after accounting for all costs and expenditures, including opportunity costs.