In Terms of Exchange Rate Forecasting, the Efficient Market School

question 32

True/False

In terms of exchange rate forecasting, the efficient market school argues that companies should spend additional money trying to forecast short-run exchange rate movements.

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Definitions:

Flotation Costs

Expenses incurred by a company in issuing new securities, including underwriting, legal, and registration fees.

Dividends Low

This term implies a situation where a company issues dividends at a lower rate or amount, possibly reflecting a strategy to reinvest earnings into the business or an indication of financial conservation.

Information Content Effect

The impact of news or information release on the financial markets, especially regarding the price of securities.

Share Price

The price of a single share of a company's stock, reflecting the market's value of the company at a given moment.