Studies of the Accuracy of Paid Exchange Rate Forecasters

question 20

Multiple Choice

Studies of the accuracy of paid exchange rate forecasters

• A)tend to support the view that "you get what you pay for".
• B)tend to support the view that forecasting is easy,at least with regard to major currencies like the euro and Japanese yen.
• C)tend to support the view that banks do their best forecasting with the yen.
• D)none of the options

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Definitions:

Risk-Free Rate

The return on an investment with zero risk, typically represented by the yield on government bonds.

Forward Rate

An agreed-upon price for a financial transaction that will occur at a future date, used in the trading of currencies, commodities, and financial instruments.

Risk-Free Rate

A speculative return rate on a risk-free investment, often exemplified by government bond yields.

Future Exchange Rate

The future exchange rate is the agreed-upon rate at which two currencies will be exchanged on a specified future date, used in hedging and trading strategies.