Which of the Following Premises Is Technical Analysis,an Approach to Exchange

question 68

Multiple Choice

Which of the following premises is technical analysis,an approach to exchange rate forecasting,based on?

• A) Price and volume data cannot be used to determine past trends.
• B) Econometric models drawn from economic theory are best suited to predict exchange rate movements.
• C) The foreign exchange market is efficient and forward exchange rates are best predictors of future spot exchange rates.
• D) Previous market trends and waves can be used to predict future market trends and waves.
• E) Since forward exchange rates are best predictors of future spot rates, it makes no sense to invest in forecasting.

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Definitions:

Net Wealth

The value of assets minus liabilities.

Consumption Spending

The total value of all goods and services consumed by households within a certain period.

Inflation Rate

The percentage change in the price level of goods and services in an economy over a period of time, often indicating the decrease in purchasing power of a currency.

Marginal Propensity

Marginal propensity measures the change in an economic agent's consumption or saving habits in response to a change in income, often used to analyze consumer behavior.