Under conditions of equilibrium, management would use ________ exchange rate as an unbiased predictor of future spot rates when preparing operating budgets.
A) the current spot
B) the forward rate
C) the black market
D) none of the above

Question

Quizplus · Accepted Answer

Under conditions of equilibrium, management would use the forward rate as an unbiased predictor of future spot rates when preparing operating budgets. The forward rate reflects the expected future spot rate based on the interest rate differential between two currencies.

Under Conditions of Equilibrium, Management Would Use ________ Exchange Rate