If a Particular Currency Is Consistently Declining Substantially Over Time

question 55

Multiple Choice

If a particular currency is consistently declining substantially over time, then a market-based forecast will usually have:

• A) underestimated the future exchange rates over time.
• B) overestimated the future exchange rates over time.
• C) forecasted future exchange rates accurately.
• D) forecasted future exchange rates inaccurately but without any bias toward consistent underestimating or overestimating.