The following mathematical expression Ft + 1(et) = S(et + 1) is of what theory of exchange rate determination?

The following mathematical expression
Ft + 1(et)   = S(et + 1)
is of what theory of exchange rate determination?

a) Big Mac Index

b) Purchasing Power Parity

c) Fisher effect

d) Interest Rate Parity

e) None of the above

The correct answer is forward rate as unbiased predictor of spot rate.

 

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