Solved

If the Forward Rate Was Expected to Be an Unbiased

Question 66

Multiple Choice

If the forward rate was expected to be an unbiased estimate of the future spot rate, and interest rate parity holds, then:


A) covered interest arbitrage is feasible.
B) the international Fisher effect (IFE) is supported.
C) the international Fisher effect (IFE) is refuted.
D) the average absolute error from forecasting would equal zero.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q61: If the pattern of currency values over

Q62: The following regression model was estimated

Q63: Market-based forecasting involves the use of historical

Q64: Forecast errors tend to be large for

Q65: Which of the following is not a

Q67: In market-based forecasting, a forward rate quoted

Q68: If points are scattered evenly on both

Q69: Huge Corporation has just initiated a

Q70: Which of the following is not a

Q71: Inflation and interest rate differentials between the