Looking over some notes from Economics and Port Management, I stumbled into something that is driving me crazy looking for an answer. What is the difference between: Expected Exchange Rates vs. Forward Exchange Rates ???
Forward rate is the rate of forward contract and everybody will see/quote the same rate (more or less) Expected rate is the rate that you expect in the future, everybody can have different expectation, model, theory and so on therefore I do not think that it is possible to specify one expected rate. for instance, you can believe that expected rate depends on inflation differential, because real rates are same all around the world.