forward rate is not an unbiased predictor of the expected future spot rate. hmmm, what the hell is this suppose to mean? Does it mean that we cant really on forward rate or we can rely on it as a predictor of expected spot rate? im getting a bit confused with unbiased and biased now… sigh…sorry , english is my second language here …
it’s easy just that forward rates are not equal to expected future spot prices… got it?