If the Foreign Exchange Market Is Efficient,forward Exchange Rates Should

question 122

Multiple Choice

If the foreign exchange market is efficient,forward exchange rates should be unbiased predictors of future spot rates.This means that;

• A)the predictions will be accurate in any specific situation.
• B)inaccuracies will not be consistently above or below future spot rates;they will be random.
• C)more accurate predictions of future spot rates can be calculated from publicly available information.
• D)market participants' collective predictions about future spot rates cannot be incorrect.

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