If E Is the Current Spot Rate (Units of Home

Multiple Choice

If e is the current spot rate (units of home currency per unit of foreign currency) , e_fwd is the current three-months forward rate, E(e) is the expected spot rate in three months, and xa is the expected rate of depreciation of the home currency in three months, then, in an efficient foreign exchange market,

A) E(e) = e_fwd.
B) e = e_fwd.
C) xa = e_fwd.
D) E(e) = e.