Which simple statistical model yields some of the best exchange rate predictions available? What does this imply for the value of models of exchange rate determination to multinational businesses?
What will be an ideal response?
It is surprisingly difficult to beat the forecasts of the random walk model. This model uses the current exchange rate as the predictor of the future exchange rate. If this model provided the best forecast, the unbiasedness hypothesis (which says the forward rate is the best predictor) would be violated. If there were a forward premium on the foreign currency, the forward rate would be above the expected future spot rate, and you would want to sell the foreign currency in the forward market.
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Identify three issues that a socially responsible company might consider when addressing concerns about how its products affect the global environment
What will be an ideal response?
The leading major manufacturer of an artificial sweetener told its customers that it would not sell its sweetener to them if they purchased any sweeteners from any other suppliers. This is
A) tied selling B) predatory pricing C) exclusive dealing D) market restriction E) refusal to deal