Given an Efficient Foreign Exchange Market, the Spot Rate Is

question 11

True/False

Given an efficient foreign exchange market, the spot rate is the rational approximation of the markets expectation of the forward rate that will exist at the end of the forward period.

---

Definitions:

Accidental Sale

A transaction where goods or services are sold unintentionally, often due to a misunderstanding or mistake.

Profit Margin

A financial metric used to assess a company's profitability by comparing net income to sales.

Fair Market Value

An estimate of the market value of a property or asset, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller.

Statute of Frauds

A legal concept that requires certain types of contracts to be in writing and signed by the parties involved to be enforceable.