DEFINITION of 'Unbiased Predictor'
The notion that the current market price of a physical commodity (its cash price or currency) will be equal to its anticipated future price based on the market's forward rate. Like anything that relies on interest rate projections, this outlook can change as economic conditions change.
INVESTOPEDIA EXPLAINS 'Unbiased Predictor'
In statistical terms, "bias" is generally considered to be the variance between a prediction and the actual outcome, so an unbiased predictor is one that, one average, closely forecasts the future behavior of the variable under consideration. For example, if a futures contract is considered an unbiased predictor of oil prices, then when the contract expires the price of oil should correspond with the anticipated price.
RELATED TERMS

Forward Contract
A customized contract between two parties to buy or sell an asset ... 
Predictive Market
A speculative market that is based on speculations regarding ... 
Prediction Market
A collection of people speculating on a variety of events  exchange ... 
Commodity
1. A basic good used in commerce that is interchangeable with ... 
Forward Rate
A rate applicable to a financial transaction that will take place ... 
Commodity Futures Contract
An agreement to buy or sell a set amount of a commodity at a ...
RELATED FAQS

What is the variance/covariance matrix or parametric method in Value at Risk (VaR)?
The parametric method, also known as the variancecovariance method, is a risk management technique for calculating the value ... Read Full Answer >> 
What is backtesting in Value at Risk (VaR)?
The value at risk is a statistical risk management technique that monitors and quantifies the risk level associated with ... Read Full Answer >> 
How much variance should an investor have in an indexed fund?
An investor should have as much variance in an indexed fund as he is comfortable with. Variance is the measure of the spread ... Read Full Answer >> 
Can the correlation coefficient be used to measure dependence?
The correlation coefficient can be used to measure the linear dependence between two random variables. The most common correlation ... Read Full Answer >> 
How do you calculate variance in Excel?
To calculate statistical variance in Microsoft Excel, use the builtin Excel function VAR. Given a set of numbers value1 ... Read Full Answer >> 
What's the difference between a confidence level and a confidence interval in Value ...
The value at risk (VaR) uses both the confidence level and confidence interval. A risk manager uses the VaR to monitor and ... Read Full Answer >>
Related Articles

Investing Basics
What Is The Impact Of Research On Stock Prices?
The answer to this question is directly related to the importance of information in the marketplace. 
Forex Education
Commodity Prices And Currency Movements
Find out which currencies are most affected by fluctuations in gold and oil prices, and improve your trading. 
Options & Futures
Commodities That Move The Markets
Find out how the everyday items you use can affect your investments. 
Fundamental Analysis
Explaining Expected Return
The expected return is a tool used to determine whether or not an investment has a positive or negative average net outcome. 
Fundamental Analysis
Explaining the Geometric Mean
The average of a set of products, the calculation of which is commonly used to determine the performance results of an investment or portfolio. 
Investing
The Labor Market Recovery’s Missing Ingredient
Job creation is running at the fastest pace since the 90s, and there is some evidence that wage growth is finally starting to accelerate, albeit modestly. 
Active Trading Fundamentals
Where And How Should You Make Your First Trade?
New traders should enter markets that offer the greatest opportunity for learning their craft while keeping risk at a minimum. 
Trading Strategies
Best Undergraduate Degrees For Day Traders
We look at some popular undergrad majors for those wanting to begin a career in the exciting world of fastpaced trading. 
Fundamental Analysis
Explaining Standard Error
Standard error is a statistical term that measures the accuracy with which a sample represents a population. 
Economics
Understanding Economic Order Quantity
Economic order quantity is an inventoryrelated equation that determines the optimum order quantity that a company should hold in its inventory.