In terms of the approaches to exchange rate forecasting,which of the following draw(s)on economic theory to construct sophisticated econometric models for predicting exchange rate movements?

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Fundamental analysis draws on economic theory to construct sophisticated econometric models for predicting exchange rate movements, while the other options do not rely on economic theory as much. Technical analysis uses past price data and chart analysis to predict future movements, fractional integration models use statistical techniques, and Markov switching models combine statistical and economic theories.

In Terms of the Approaches to Exchange Rate Forecasting,which of the Following