--%>
Assignment Help - homework help

Unbiased predictor of the future spot exchange rate

Describe the conditions under which the forward exchange rate will be an unbiased predictor of the future spot exchange rate.

The forward exchange rate will be an unbiased predictor of the future spot rate if (I) the risk premium is not significant and (ii) foreign exchange markets are informationally efficient.

   Related Questions in Financial Management

  • Q : Explain many types of platinum hedging

    How are many platinum hedging types?

    		•
  • Q : Problem related to margin account

    Suppose today's settlement price on a CME DM futures contract is $0.6080/DM. You have a short position in one contract. Your margin account presently has a balance of $1,700. The next three days' settlement prices are $0.6066, $0.6073, & $0.5989. Compu

    		•
  • Q : Prblem [CAPM Estimate of Cost of Equity

    [CAPM Estimate of Cost of Equity Capital] Voice River, Inc., has successfully moved through its early life cycle stages and now is well into its rapid-growth stage. However, by traditional standards this provider of media-on-demand services is still considered to be a relatively small venture. The i

    		•
  • Q : Trading at small figure bid-ask of 35-40

    A CD/$ bank trader is at present quoting a small figure bid-ask of 35-40, while the rest of the market is trading at CD1.3436-CD1.3441. What is implied regarding the trader's beliefs by his prices?The trader have to think the Canadian dollar wi

    		•
  • Q : Question on optimal weights Assume you

    Assume you are interested in investing in the stock markets of 7 countries that means France, Canada, Japan, Germany, Switzerland, the United Kingdom, and the United States. Particularly, you would like to solve out for the optimal (tangency) portfolio compris

    		•
  • Q : Three financial factors that affect the

    Explain the three financial factors that affect the value of a business.

    		•
  • Q : Explain the denotation a utility

    Explain the denotation a utility function and how it can vary between investors?

    		•
  • Q : Generalized Auto Regressive Conditional

    What is Generalized Auto Regressive Conditional Heteroscedasticity?

    		•
  • Q : Illustrates an example of measure of

    Illustrates an example of measure of risk aversion?

    		•
  • Q : Explain different forms of market

    Explain different forms of market efficiency.

    		•