True or False?
The correct answer is False. If enough market participants disregard the risk of taking forward mark/dollar positions, the statement would be true. But we can't assume that there is no risk premium. As a result, the observed forward discount on the dollar may simply reflect the risk of taking a speculative position on it.
Suppose that the entire forward discount represents an allowance for risk. This means that a trader who has a forward commitment to sell marks for dollars needs to have a forward price of the mark in terms of the dollar 2 cents or 4.35 percent above the spot price he expects to rule on the maturity date of the forward contract to compensate him for the risk of holding dollars forward. This would imply, of course, that the trader expects no change in the dollar/mark exchange rate during the life of the forward contract.