When the Forward Rate Is Equal to the Expected Future

question 31

Multiple Choice

When the forward rate is equal to the expected future spot rate,the forward rate is said to be ________ the future spot rate.

• A) an information signal for
• B) an unbiased predictor of
• C) a hedge for
• D) in parity with the expected future spot rate

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Understand the concept of normal and inferior goods, including how changes in income affect the demand for these goods.

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Recognize the relationship between price changes and total revenue, especially in terms of elasticity.