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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Definitions:

Iron

A chemical element with symbol Fe and atomic number 26, known for its high strength and magnetic properties.

Limiting Reactant

The reactant in a chemical reaction that limits the amount of product that can be formed because it is used up first.

Theoretical Yield

The maximum amount of product that can be generated from a given amount of reactants in a chemical reaction, under ideal conditions.

Limiting Reactant

The reactant in a chemical reaction that limits the amount of product that can be formed; the reaction stops when all of this reactant is consumed.