A Forecast of a Currency One Year in Advance Is

question 7

True/False

A forecast of a currency one year in advance is typically more accurate than a forecast one week in advance since the currency reverts to equilibrium over a longer term period.

---

Definitions:

Average Rate of Return

The average annual income earned through an investment, expressed as a percentage of the original investment.

Investment Banks

Financial institutions specializing in complex financial transactions such as underwriting, acting as intermediaries in mergers and acquisitions, and issuing new securities.

Capital

Wealth in the form of money or other assets owned by a person or organization or available for a purpose such as starting a company or investing.

Securities

Financial instruments that represent an ownership position in a corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.