It is often claimed that the forward exchange rate is set by arbitrage to satisfy (covered) interest

Question:

It is often claimed that the forward is set by arbitrage to satisfy (covered) interest rate parity. Explain how interest rate parity can be satisfied and how the forward can be set by speculators in reference to the expected future spot Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...