The VAR method presumes that the distribution of exchange rate movements is normal.

Name: The VAR method presumes that the distribution of exchange rate movements is normal.
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The VAR method assumes that the distribution of exchange rate movements is normal. This allows for the calculation of probabilities and confidence intervals for forecasting purposes. However, in reality, the distribution of exchange rate movements may not always be normal, and other methods may need to be used to account for this.

The VAR Method Presumes That the Distribution of Exchange Rate