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Do you agree with the following statements? Please provide reasons to support your answer. Covered...

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Finance

Do you agree with the following statements? Please provide reasons to support your answer.

Covered interest parity is forced by arbitrage, which is not the case for uncovered interest rate parity. If the forward rate is equal to the expected future spot rate, we say that the forward rate is an unbiased predictor of the future spot rate: F = E(S1). In this special case, given that covered interest parity holds, uncovered interest parity would also hold (and vice versa). In other words, if uncovered interest rate parity (and covered interest parity) holds, the forward rate is unbiased predictor of future spot rate

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