It Is Often Argued That Forward Exchange Rates Should Be

question 19

Essay

It is often argued that forward exchange rates should be unbiased predictors of future spot exchange rates.When the foreign exchange market is efficient,forward rates are not able to be an unbiased predictor.Is this true or false?

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Definitions:

Game Sales

The total revenue generated from the sale of video games within a specific timeframe.

Weighted Average Model

A mathematical method that calculates the mean of a set of numbers, where some numbers contribute more significantly to the final average due to their respective weights.

Exponential Smoothing Model

A time series forecasting method that applies weighting factors which decrease exponentially to past observations.

Simple Exponential Smoothing

A time series forecasting method for univariate data that uses a weighted average of past observations, with the weights declining exponentially as the observations get older.