Which one of these presents the idea that forward rates are equal to expected future spot rates?

Question

Quizplus · Accepted Answer

The unbiased forward rate condition states that forward rates should be equal to expected future spot rates. It suggests that the forward exchange rate between two currencies will be equal to the ratio of the two currencies' spot exchange rates adjusted for the difference between their respective interest rates over the same period. Therefore, the correct choice is (E) Unbiased forward rate condition.

Which One of These Presents the Idea That Forward Rates