Which of the following forecasting techniques would best represent the use of relationships between economic factors and exchange rate movements to forecast the future exchange rate?
A) fundamental forecasting.
B) market-based forecasting.
C) technical forecasting.
D) mixed forecasting.

Question

Quizplus · Accepted Answer

Fundamental forecasting involves using economic factors and relationships between them to forecast future exchange rates. This technique considers macroeconomic variables such as interest rates, inflation rates, and GDP growth to predict exchange rate movements, which aligns with the given scenario. Market-based forecasting relies on analyzing patterns and movements in the exchange rate market. Technical forecasting involves using past exchange rate data to identify patterns and trends to predict future movements. Mixed forecasting is a combination of different forecasting techniques.

Which of the Following Forecasting Techniques Would Best Represent the Use