Monetary and Asset or Portfolio Models Have Not Been Very

question 1

Multiple Choice

Monetary and asset or portfolio models have not been very successful in forecasting exchange rates,especially in the short run,due to which of the following reasons?

• A)Exchange rates are strongly affected by new information that is characteristically unpredictable
• B)Although offering theoretical support for the conclusions drawn by the models,the models are weak econometrically speaking
• C)Expectations of exchange market participants often become self-fulfilling
• D)Both A & C

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