External Interest Rate Effects difference, tangible, actually, between, forward

transferpricing

CFAI Text Vol 6, P.169, 1st paragraph and 2008 AM Exam Q10B

Expected I/R effect :
The return from the implied forward rates.
Unexpected I/R effect : The difference between the actual realized return and the market implied return from the forward rates.

Can anyone explain clearly/tangible what do these 2 definitions actually mean ?

ohai

mik82,

Thank you so much !