The absolute forecast error of a currency is ____, on average, in periods when the currency is more ____.
A) lower; volatile
B) higher; stable
C) lower; stable
D) None of these are correct.

Question

Quizplus · Accepted Answer

The absolute forecast error of a currency is generally lower in periods when the currency is more stable. This is because stable conditions make it easier to predict currency movements, leading to smaller forecast errors.

The Absolute Forecast Error of a Currency Is ____, on Average