Q: In the passage below, is the implied forward rates (expect return) considered the same as the market implied return from forward rates (unexpected return)?
- Expected return = Implied forward rate
- Unexpected return = The actual realized return minus the market implied return from forward rates
Therefore, actual realized return = expected return + unexpected return.
Here is a section from Managing Investment Portfolios: A Dynamic Process edited by John L. Maginn, part of the CFA Curricuum (page 764)
Am I correct to consider these two bold words to be the same?