Which of the following is relatively more useful to predict foreign long-term exchange rates?

Question

Quizplus · Accepted Answer

No model comes close to perfectly predicting future movements in foreign exchange rates.The best that can be said is that in the short run,forward exchange rates provide the best predictors of exchange rate movements,and in the long run,fundamental economic factors-particularly relative inflation rates-should be watched because they influence exchange rate movements.

Which of the Following Is Relatively More Useful to Predict