If the Exchange Rate Follows a Random Walk

Multiple Choice

If the exchange rate follows a random walk

A) the future exchange rate is unpredictable.
B) the future exchange rate is expected to be the same as the current exchange rate, S_t = E(S_t+1) .
C) the best predictor of future exchange rates is the forward rate F_t = E(S_t+1|I_t) .
D) both b) and c)