Today's forward rate must equal the future spot rate.

Name: Today's forward rate must equal the future spot rate.
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Question

Quizplus · Accepted Answer

Today's forward rate is calculated based on various factors such as interest rates, expected exchange rate movements, and market expectations. However, it is not a guarantee that the forward rate will equal the future spot rate. The actual spot rate at the time of settlement may differ from the forward rate, leading to either a gain or loss for the parties involved in the transaction.

Today's Forward Rate Must Equal the Future Spot Rate