Global Finance
MULTIPLE CHOICE QUESTIONS:
1. Forecasts a) become more accurate with longer time horizons b) are rarely perfect c) are more accurate for individual items than for groups of items d) all of the above.
2. A fundamental analysis in exchange rate forecasting involves the following except . a) inflation rates b) interest rates c) money supply d) price trends
3. Which statement is not true about forecasting method? a) There is no single best method of forecasting. b) Technical analysis is preferred to currency traders. c) Fundamental analysis is preferred by economists. d) Mixed forecasting will be the best since it has mixed all forecasting methods.
4. A technical analysis in exchange rate forecasting involves the following except .
a) past price b) political factors c) price charting d) volume movements
5. Which one is not one of the three kinds of efficient markets?
a) weak form efficient market b) semi-strong form efficient market
c) strong form efficient market d) perfectly efficient form market
6. If the forward rate is the best available predictor (unbiased) of future spot rates, the forward market is .
a) inefficient b) efficient c) semi-efficient d) none of the above
7. Whether a country will devalue its currency under a fixed rate system is ultimately a __ decision.
a) economic b) monetary c) political d) fiscal
8. The spot rate is US$0.50 per Australian dollar. The annual interest rates are 12 percent for the United States and 8 percent for Australia. If these interest rates remain constant, then what is the US dollar market forecast of the spot rate for the Australian dollar in five years?
a) $.4669 b) $.5899 c) $.5997 d) $.5447
9. A forecast based on the previous forecast plus a percentage of the forecast error (previous) is a(an)A forecast based on the previous forecast plus a percentage of the forevious)
a) qualitative forecast b) naive forecast
c) moving
1. Forecasts a) become more accurate with longer time horizons b) are rarely perfect c) are more accurate for individual items than for groups of items d) all of the above.
2. A fundamental analysis in exchange rate forecasting involves the following except . a) inflation rates b) interest rates c) money supply d) price trends
3. Which statement is not true about forecasting method? a) There is no single best method of forecasting. b) Technical analysis is preferred to currency traders. c) Fundamental analysis is preferred by economists. d) Mixed forecasting will be the best since it has mixed all forecasting methods.
4. A technical analysis in exchange rate forecasting involves the following except .
a) past price b) political factors c) price charting d) volume movements
5. Which one is not one of the three kinds of efficient markets?
a) weak form efficient market b) semi-strong form efficient market
c) strong form efficient market d) perfectly efficient form market
6. If the forward rate is the best available predictor (unbiased) of future spot rates, the forward market is .
a) inefficient b) efficient c) semi-efficient d) none of the above
7. Whether a country will devalue its currency under a fixed rate system is ultimately a __ decision.
a) economic b) monetary c) political d) fiscal
8. The spot rate is US$0.50 per Australian dollar. The annual interest rates are 12 percent for the United States and 8 percent for Australia. If these interest rates remain constant, then what is the US dollar market forecast of the spot rate for the Australian dollar in five years?
a) $.4669 b) $.5899 c) $.5997 d) $.5447
9. A forecast based on the previous forecast plus a percentage of the forecast error (previous) is a(an)A forecast based on the previous forecast plus a percentage of the forevious)
a) qualitative forecast b) naive forecast
c) moving