Investors who use trends to make forecasts have rational expectations.

Name: Investors who use trends to make forecasts have rational expectations.
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Question

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Investors using trends to make forecasts are often relying on past patterns to predict future outcomes, which does not necessarily align with the rational expectations theory. This theory suggests that individuals' forecasts are optimally based on all available information, including the understanding of economic models, rather than just past trends.

Investors Who Use Trends to Make Forecasts Have Rational Expectations