Which of the Following Is True Regarding Forecast Errors

question 27

Multiple Choice

Which of the following is true regarding forecast errors?

• A)Forecasts for the Chinese yuan are likely to have large forecast errors because the yuan is a volatile currency.
• B)Potential forecast errors may vary depending on the time horizon, the currency's volatility, and whether the country issuing the currency is experiencing political problems.
• C)Forecasts for currencies in high-inflation countries will be more accurate if they use the spot rate rather than the forward rate because the spot rate captures the difference in interest rates (and thus inflation rates) between two countries.
• D)B and C

---

Definitions:

Local Knowledge Base

The accumulation of understanding, skills, and expertise that exists within a particular geographical area or community, often specific to local culture or conditions.

Innovator's Imperative

The necessity for creators and businesses to continually innovate and adapt to stay competitive and relevant.

Standardized Protocol

Agreed-upon guidelines or procedures designed to ensure consistency and efficiency in various industries or fields.

Google's "70-20-10 Rule"

A strategy used by Google that allocates 70% of resources to core business tasks, 20% to related projects, and 10% to entirely new, experimental initiatives.