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If the Forward Rate Is Used as a Forecaster of the Spot

Question 16

Multiple Choice

If the forward rate is used as a forecaster of the spot rate:


A) the forecasting error equals the difference between the current spot rate and the forward rate at the maturity of the forward contract
B) the forecasting error equals the difference between the current forward rate and the spot rate at the maturity of the forward contract
C) the forecasting error equals the difference between the current forward rate and the current spot rate
D) none of the given answers

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