If you were attempting to characterize the currency in a floating rate system,the most important factor to analyze is the ________ of the future exchange rate changes.

Question

Quizplus · Accepted Answer

The conditional distribution of future exchange rate changes is the most important factor to analyze in characterizing the currency in a floating rate system because it provides information on the likelihood of different exchange rate movements. It considers the probability of different outcomes given a certain set of conditions, such as changes in economic factors or geopolitical events. The histogram, sample mean, and sample variance may also provide useful information, but they do not capture the conditional probability distribution of future exchange rate changes.

If You Were Attempting to Characterize the Currency in a Floating