If a Particular Currency Is Consistently Declining Substantially Over Time

question 57

Multiple Choice

If a particular currency is consistently declining substantially over time, then a market-based forecast will usually have:

• A) underestimated the future exchange rates over time.
• B) overestimated the future exchange rates over time.
• C) forecasted future exchange rates accurately.
• D) forecasted future exchange rates inaccurately but without any bias toward consistent underestimating or overestimating.

---

Definitions:

Spontaneous Recovery

A process in which a previously extinguished response reemerges after the conditioned stimulus is presented again.

Conditioned Stimulus

In classical conditioning, a previously neutral stimulus that, after becoming associated with the unconditioned stimulus, triggers a conditioned response.

Reflexive Response

An automatic reaction to a stimulus, not under conscious control, often protecting the body from harm or promoting its physiological well-being.

Neutral Stimulus

A stimulus that initially produces no specific response other than focusing attention, until it is paired with an unconditioned stimulus.