Which of the following forecasting techniques would best represent sole use of today's spot exchange rate of the euro to forecast the euro's future exchange rate?
A) fundamental forecasting.
B) market-based forecasting.
C) technical forecasting.
D) mixed forecasting.

Question

Quizplus · Accepted Answer

Market-based forecasting involves the use of current market conditions, such as spot exchange rates, to predict future exchange rate movements. Therefore, sole use of today's spot exchange rate of the euro would be best represented by market-based forecasting. Fundamental forecasting involves analyzing economic, political, and other fundamental factors that may affect exchange rates, while technical forecasting involves analyzing past exchange rate movements to identify trends and patterns. Mixed forecasting combines both market-based and fundamental or technical analysis.

Which of the Following Forecasting Techniques Would Best Represent Sole