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 the above

Question

Quizplus · Accepted Answer

The absolute forecast error of a currency is typically lower in periods when the currency is more stable. This is because stable periods exhibit less unexpected fluctuation, making forecasting more accurate and errors smaller.

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