Which of the Following Positions Is Adopted by the Inefficient

question 30

Multiple Choice

Which of the following positions is adopted by the inefficient market school of thought toward exchange rate forecasting?

• A)Forward exchange rates are the best possible predictors of future spot exchange rates.
• B)Forward exchange rates represent market participants' collective predictions of likely spot exchange rates.
• C)Companies cannot beat the markets because forward rates reflect all available information about likely future changes in exchange rates.
• D)Investing in forecasting services can improve the foreign exchange market's estimate of future exchange rates.
• E)The foreign exchange market is efficient at setting forward rates,which are unbiased predictors of future spot rates.

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Definitions:

Sympathy

The feelings of pity and sorrow for someone else's misfortune, often prompting a desire to offer comfort or assistance.

Autonomy

The ability to assert one’s own needs in a relationship.

Guilt

A psychological condition that arises when an individual believes they have done wrong, violating moral or ethical standards.

Social-Learning View

A theory that emphasizes the role of observation, imitation, and modeling in acquiring new behaviors and skills.