Huge Corporation Has Just Initiated a Market-Based Forecast System Using

question 69

Multiple Choice

Huge Corporation has just initiated a market-based forecast system using the forward rate as an estimate of the future spot rate of the Japanese yen (¥) and the Australian dollar (A$) . Listed below are the forecasted and realized values for the last period:
$\begin{array}{llcc} \underline{ \text { Currency }} & \underline{ \text { Forecasted Value}}&\underline{ \text {Realized Value}} \\ \text { Australian dollar } &\$.60&\$.55\\ \text {Japanese yen } &\$.0067&\$.0069\\\end{array}$

According to this information and using the absolute forecast error as a percentage of the realized value, the forecast of the yen by Huge Corp. is ____ the forecast of the Australian dollar.

• A) more accurate than
• B) less accurate than
• C) more biased than
• D) the same as

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