being equal to a future spot rate and a risk premium (not to be confused with a forward premium): The current spot rate can be introduced so that the equation solves for the forward-spot differential (the difference between the forward rate and the current spot rate): Eugene Fama concluded that large positive correlations of the difference between the forward exchange rate and the current spot exchange rate signal variations over time in the premium component of the forward-spot differential or in the forecast of the expected change in the spot exchange rate. Fama suggested that slope coefficients in the regressions of the difference between the forward rate and the future spot rate , and the expected change in the spot rate , on the forward-spot differential which are different from zero imply variations over time in both components of the forward-spot differential: the premium and the expected change in the spot rate. Fama's findings were sought to be empirically validated by a significant body of research, ultimately finding that large variance in expected changes in the spot rate could only be accounted for by risk aversion coefficients that were deemed "unacceptably high." Other researchers have found that the unbiasedness hypothesis has been rejected in both cases where there is evidence of risk premia varying over time and cases where risk premia are constant. Other rationales for the failure of the forward rate unbiasedness hypothesis include considering the conditional bias to be an exogenous variable explained by a policy aimed at smoothing interest rates and stabilizing exchange rates, or considering that an economy allowing for discrete changes could facilitate excess returns in the forward market. Some researchers have contested empirical failures of the hypothesis and have sought to explain conflicting evidence as resulting from contaminated data and even inappropriate selections of the time length of forward contracts. Economists demonstrated that the forward rate could serve as a useful proxy for future spot exchange rates between currencies with liquidity premia that average out to zero during the onset of floating exchange rate regimes in the 1970s. Research examining the introduction of endogenous breaks to test the structural stability of cointegrated spot and forward exchange rate time series have found some evidence to support forward rate unbiasedness in both the short and long term. Forward Exchange Contract A forward exchange contract is identified as an agreement that is made between two parties with