Researchers have found that the fundamental approach to exchange rate forecasting
A)outperforms the efficient market approach.
B)fails to more accurately forecast exchange rates than either the random walk model or the forward rate model.
C)fails to more accurately forecast exchange rates than the random walk model but is better than the forward rate model.
D)outperforms the random walk model,but fails to more accurately forecast exchange rates than the forward rate model.

Question

Quizplus · Accepted Answer

The fundamental approach to exchange rate forecasting does not outperform simpler models like the random walk model or the forward rate model, indicating its limitations in accurately predicting future exchange rates.

Researchers Have Found That the Fundamental Approach to Exchange Rate