Which of the Following Is Not a Method of Forecasting

question 4

Multiple Choice

Which of the following is not a method of forecasting exchange rate volatility?

• A) using the absolute forecast error as a percentage of the realized value
• B) using the volatility of historical exchange rate movements as a forecast for the future
• C) using a time series of volatility patterns in previous periods
• D) deriving the exchange rate's implied standard deviation from the currency option pricing model

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Definitions:

Confidence Interval

A range of values, derived from sample data, that is likely to contain the value of an unknown population parameter with a specified level of confidence.

Confidence Interval

A variety of values, sourced from sample statistics, with a high likelihood of containing an undetermined population parameter's value.

Sample Size

The number of observations or elements selected from a population to be analyzed.

Population Mean

The average of a set of values in an entire population, representing the central tendency of the population.