question archive 1) You use a market-determined exchange rate (such as the spot rate or forward rate) to forecast the spot rate in the future

1) You use a market-determined exchange rate (such as the spot rate or forward rate) to forecast the spot rate in the future

Subject:BusinessPrice:2.86 Bought3

1) You use a market-determined exchange rate (such as the spot rate or forward rate) to forecast the spot rate in the future. This method for forecasting exchange rates can be categorised as:

Select one:

a. market-based

b. technical

c. fundamental

d. mixed

e. None of these

2)Buyer of ____ options ________ premium and ______ strike price.

Select one:

a. put, pays, receives

b. put, receive, pays  

c. put, pays, pays  

d. call, receives, receives

e. call, pays, receives       

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1)a. market-based

market-based forecasting is the use of a market-determined exchange rate (such as the spot rate or forward rate) to forecast the spot rate in the future.

mixed forecasting is the development of forecasts based on a mixture of forecasting techniques.

technical forecasting is The method of using statistics to define potential security price patterns and to make or propose investment decisions on the basis of anticipated trends. Instead of attempting to calculate the inherent value of stocks, quantitative forecasting focuses on problems such as trading rate, demand, and uncertainty.

2)e. call, pays, receives  

At the moment of entering the contract, the buyer of a call option pays the option premium in full. Afterwards, should the market move in his favor, the buyer enjoys a potential profit. Beyond the purchase price, there is no possibility of the option generating any further loss. One of the most attractive features of purchasing options is this. The purchaser secures unlimited profit potential with a known and strictly limited possible loss for a limited investment.