What Currency Forecasting Technique Links Exchange Rates to Macroeconomic Variables

question 5

Multiple Choice

What currency forecasting technique links exchange rates to macroeconomic variables such as money supply and inflation?

• A) technical analysis
• B) fundamental analysis
• C) exchange rate forecasting
• D) mean absolute error

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Definitions:

Variance

Measures the dispersion of a set of data points around their mean; mathematically, it is the average of the squared differences from the Mean.

SSE

Sum of Squared Errors, a measure used in statistics to quantify the discrepancy between the data and an estimation model.

SST

In statistics, SST stands for Total Sum of Squares, which is a measure of the total variance in a dataset, representing the sum of squared differences from the mean.

One-Way ANOVA

A statistical test that assesses whether there are any statistically significant differences between the means of three or more independent (unrelated) groups.