The main approaches to forecasting exchange rates are:
A) Efficient market, Fundamental, and Technical approaches.
B) Efficient market and Non-Technical approaches.
C) Efficient market and Fundamental approaches only.
D) Fundamental and Non-Technical approaches.

Question

Quizplus · Accepted Answer

The three main approaches to forecasting exchange rates are the Efficient market, Fundamental, and Technical approaches. The efficient market approach states that the current exchange rate already reflects all relevant information, while the fundamental approach looks at economic factors and indicators such as inflation rates, interest rates, and GDP to determine the value of a currency. The technical approach uses past exchange rate data to make predictions about future movements. Therefore, A is the best choice as it includes all three approaches.

The Main Approaches to Forecasting Exchange Rates Are