If the Forward Exchange Rate Is an Unbiased Predictor of Future

question 36

True/False

If the forward exchange rate is an unbiased predictor of future spot rates, then future spot rates will always be equal to current forward rates.

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Definitions:

Profitability Ratios

Financial metrics used to evaluate a company's ability to generate profit relative to its revenue, assets, equity, or other financial balances.

Enterprise

A business or company organization, including both for-profit and non-profit activities.

Financial Statements

Formal records that outline the financial activities and condition of a business, including balance sheet, income statement, and cash flow statement.

Common Size Analysis

An accounting method that expresses each line item on a financial statement as a percentage of a base amount, facilitating comparison across periods and companies.