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If the forward rate is expected to be an unbiased estimate of the future spot rate, and interest rate parity holds, then: a . the

If the forward rate is expected to be an unbiased estimate of the future spot rate, and interest rate parity holds, then:

.

the international Fisher effect

(

IFE

)

is refuted.

.

the international Fisher effect

(

IFE

)

is supported.

.

covered interest arbitrage is feasible.

.

the average absolute error from forecasting would equal zero.

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