a. Could the forward market be efficient even if agents do not have rational expectations? b. If

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a. Could the forward market be efficient even if agents do not have rational expectations?

b. If agents have rational expectations, does it follow that the forward rate must be an unbiased forecast of spot rate?

c. If agents are rational and the market is efficient, can you ever lose money?

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Exchange Rates and International Finance

ISBN: 978-0273786047

6th edition

Authors: Laurence Copeland

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Question Posted: Apr 03, 2019 11:59 AM

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a. Could the forward market be efficient even if agents do not have rational expectations? b. If

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a Yes but it has to be improbable For example suppose all agents were of two types those who were ov...View the full answer

Exchange Rates and International Finance

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