Concerning exchange rate forecasting, ______ are common sense models that require the gathering of a wide array of political and economic data and the interpretation of these data in terms of the timing, direction, and magnitude of exchange rate changes.
A) judgmental forecasts
B) technical forecasts
C) fundamental forecasts
D) econometric forecasts

Question

Quizplus · Accepted Answer

Judgmental forecasts, also known as qualitative forecasts, rely on expert opinions and analysis of various political and economic factors to predict exchange rate changes. Technical forecasts use past exchange rate data and trends to predict future changes, while fundamental forecasts look at the underlying economic factors that influence exchange rates, such as inflation and interest rates. Econometric forecasts use statistical models to analyze multiple variables and their relationships to predict exchange rate changes. However, the question specifically mentions the gathering and interpretation of data, which suggests a reliance on expert judgment rather than purely statistical analysis, making judgmental forecasts the most appropriate choice.

Concerning Exchange Rate Forecasting, ______ Are Common Sense Models That