Forward rates are always equal to the actual future exchange rates.

Question

Quizplus · Accepted Answer

Forward rates are estimates of future exchange rates based on current market conditions and expectations. However, actual future exchange rates can be affected by various factors such as economic and political events that may not have been taken into consideration when calculating the forward rate. Therefore, forward rates are not always equal to the actual future exchange rates.

Forward Rates Are Always Equal to the Actual Future Exchange