Answer:
The statement is false. Future spot exchange rates are based on economic predictions of economists, who consider all the possible alterations of the market in a given economy.
Explanation:
Future exchange rates are prices set by banks and other important economic actors, which regulate the value at which different currencies will be exchanged or certain goods will be bought. These future rates are set through an analysis of the political and economic situation of the market in which the exchange will take place, with the aim of ensuring competitive and efficient values in the face of the probabilities of market shocks, both internal and external.
TRUE. In theory Forward Exchange rates are unbiased predictors of future spot exchange rates.
In an Uncovered Interest Arbitrage, it is the notion that Forward Exchange rates are unbiased predictors of future spot rates, because it is assumed that an investor will borrow from a country which provides low-interest rate, and will convert the funds to the currency of a high interest rate country, and thus the country from which it took loan will not suffer any profit or loss.
And if the Forward Exchange rate will be biased predictor, than the Country and the Investor both will suffer tremendous losses. Hence, this statement is True.
Learn More about Forward Exchange Rates here:
https://brainly.com/question/11160294
