Assume That the U

question 45

Multiple Choice

Assume that the U.S. interest rate is 11 percent, while Australia's one-year interest rate is 12 percent. Assume interest rate parity holds. If the one-year forward rate of the Australian dollar was used to forecast the future spot rate, the forecast would reflect an expectation of:

• A) depreciation in the Australian dollar's value over the next year.
• B) appreciation in the Australian dollar's value over the next year.
• C) no change in the Australian dollar's value over the next year.
• D) information on future interest rates is needed to answer this question.

---

Definitions:

Lung Cancer Deaths

Fatal outcomes resulting from lung cancer, a type of cancer that begins in the lungs and is often associated with smoking.

Negative Reinforcing

A behavior modification process where the removal of an unpleasant stimulus strengthens a behavior.

Negative Reinforcer

A stimulus that, when removed after a behavior occurs, increases the likelihood of that behavior being repeated.

Reduction In Tension

A process or action that decreases stress or anxiety levels in individuals or groups.