The Condition Stating That the Current Forward Rate Is an Unbiased

question 86

Multiple Choice

The condition stating that the current forward rate is an unbiased predictor of the future spot exchange rate is called:

• A)the unbiased forward rates condition.
• B)uncovered interest rate parity.
• C)the international Fisher effect.
• D)purchasing power parity.
• E)interest rate parity.

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Definitions:

Gain or Loss

The financial result that occurs when the selling price of an asset differs from its carrying amount on the books.

Equity Method

An accounting technique used to record investments in associate companies, recognizing the investor's share of the investee's profits or losses.

Investee's Net Income

The portion of profit or income earned by a company in which another company has invested.

Periodic Net Income

The net income calculated at specific intervals, such as monthly or quarterly, reflecting the profitability of a company during that time period.