For daily measurement intervals, both nominal and real exchange rates are close to a random walk.

Question

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For daily measurement intervals, both nominal and real exchange rates are often considered to be close to a random walk, which means their future values are difficult to predict based on past values. This is due to the influence of various unpredictable factors such as changing economic conditions, government policies, and global events. However, their behavior may differ over longer time intervals.

For Daily Measurement Intervals, Both Nominal and Real Exchange Rates