Examples of a business motivation for long-run exchange rate forecasts include all but which of the following?
A)A major capital investment in a foreign country.
B)The desire to hedge a 90-day security.
C)A portfolio manager considering investing in foreign securities.
D)All of the above are examples of a business motivation for long-run exchange rate forecast.

Question

Quizplus · Accepted Answer

Long-run exchange rate forecasts are typically used for strategic investment decision-making, such as major capital investments in foreign countries and portfolio diversification. Hedging a 90-day security would involve a short-term exchange rate forecast rather than a long-run forecast.

Examples of a Business Motivation for Long-Run Exchange Rate Forecasts