If the Forward Rate Is an Unbiased Predictor of the Expected

question 56

Multiple Choice

If the forward rate is an unbiased predictor of the expected spot rate, which of the following is NOT true?

• A) The expected value of the future spot rate at time 2 equals the present forward rate for time 2 delivery, available now.
• B) The distribution of possible actual spot rates in the future is centered on the forward rate.
• C) The future spot rate will actually be equal to what the forward rate predicts.
• D) All of the above are true.

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Definitions:

Protostomes

A group of animals characterized by the blastopore (the first opening in the developing embryo) becoming the mouth, including groups like mollusks and annelids.

Deuterostomes

A group in the animal kingdom characterized by the development of the anus from the first opening in the embryo, with the mouth developing later.

Embryonic Development

The process through which an embryo forms and develops from fertilization to birth.

Cephalization

Having a well-recognized anterior head with a brain and sensory receptors.