Which of the Following Is True of the Efficient Market

question 81

Multiple Choice

Which of the following is true of the efficient market school of thought toward exchange rate forecasting?

• A)Forward rates are not unbiased predictors of future spot rates.
• B)Accurate predictions of future spot rates can be calculated from publicly available information.
• C)Prices do not reflect all available information about the market.
• D)Inaccuracies in predictions will not be consistently above or below future spot rates; they will be random.
• E)Forecasts might provide better predictions of future spot rates than forward exchange rates do.

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Definitions:

Focused Cost Leadership

A strategic approach where a company aims to be the lowest-cost producer in a particular niche or segment, offering prices lower than competitors while targeting specific customer groups.

Differentiation

In business, the process of making a product or service distinct from competitors in the market, often by emphasizing unique features or benefits.

BCG Matrix

A strategic business tool designed by the Boston Consulting Group to help organizations analyze their product lines or business units for decision-making purposes.

Market Share

The proportion of an industry's sales that a specific company secures.