Define forward exchange rate will be an unbiased predictor, Financial Management

Explain the conditions under which the forward exchange rate will be an unbiased predictor of the future spot exchange rate.

Answer:  the conditions when forward exchange rate will be an unbiased predictor of the future spot rate is

a) If the risk premium is insignificant and

b) If foreign exchange markets are informationally efficient.

Posted Date: 5/9/2013 1:32:14 AM | Location : United States







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