Which of the Following Is Not a Method of Forecasting

question 70

Multiple Choice

Which of the following is not a method of forecasting exchange rate volatility?

• A) using the absolute forecast error as a percentage of the realized value.
• B) using the volatility of historical exchange rate movements as a forecast for the future.
• C) using a time series of volatility patterns in previous periods.
• D) deriving the exchange rate's implied standard deviation from the currency option pricing model.

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Definitions:

Sell

The act of giving something in exchange for money.

Extraction Costs

The expenses associated with the removal of natural resources from the earth, such as mining for minerals or drilling for oil.

Nonrenewable Resource

A natural resource that cannot be replaced once it has been used or is not replenished in a short period of time, such as fossil fuels and minerals.

Removal

The process of moving or eliminating something from a certain place or context.