You can earn abnormal returns on your investments via macro forecasting ________.
A) if you can forecast the economy at all
B) if you can forecast the economy as well as the average forecaster
C) if you can forecast the economy better than the average forecaster
D) only if you can forecast the economy with perfect accuracy

Question

Quizplus · Accepted Answer

To earn abnormal returns on your investments via macro forecasting, you need to be able to forecast the economy better than the average forecaster. This will allow you to identify mispricings in the market and make profitable investment decisions. However, it is unlikely that anyone can forecast the economy with perfect accuracy, so option D is not the correct answer. Option A is not precise enough and option B does not go far enough, as being able to forecast as well as the average forecaster may not be enough to generate abnormal returns.

You Can Earn Abnormal Returns on Your Investments Via Macro