How to assess performance in forecasting exchange rates
Response to the following problem:
Detecting a Forecast Bias
Explain how to assess performance in forecasting exchange rates. Explain how to detect a bias in forecasting exchange rates.
Make sure you use enough details to support your answer.
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The firm asks you to determine which currency was forecasted with greater accuracy.
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Explain how to assess performance in forecasting exchange rates.
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What are some limitations of using a fundamental technique to forecast exchange rates?
Explain the market based technique for forecasting exchange rates. What is the rationale for using market-based forecasts?
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