- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 8. Currency Exchange Rates: Understanding Equilibrium Value
- Subject 3. A Long-Term Framework for Exchange Rates
CFA Practice Question
If you state that the forward exchange rate is an unbiased predictor of the spot exchange rate, you are basically implying:
B. Uncovered interest rate parity holds.
C. The international Fisher effect holds.
A. Covered interest rate parity holds.
B. Uncovered interest rate parity holds.
C. The international Fisher effect holds.
Correct Answer: B
User Contributed Comments 2
| User | Comment |
|---|---|
| davidt876 | why not covered? i thought uncovered only considered the interest rate differential and the spot rate? while covered links in forward exchange rates.. |
| warnggg | Shouldn't this be Forward Rate Parity? |