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Out of a total of 50 forecasts for the rate the

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Unformatted text preview: es. Out of a total of 50 forecasts for the $/€ rate, the companies reported the number of times they correctly forecast appreciations and depreciations: Correct Down Forecasts Morrissey Forex Advisors Pixie Exchange Land FOREX Cures Correct Up Forecasts 20 5 20 12 4 12 There are a total of 35 dollar appreciations (down periods) and 15 dollar depreciations (up periods) in the sample. Blake wants to know two things: a. Can anything be said about the companies’ forecasting ability with the available data? Answer: Yes, one can compute the number of correct “directional” forecasts. Morrissey has the highest correct proportion with 25 out of 50 correct, whereas the other firms have less than 50% correct. However, note that the dollar over this period was relatively strong and appreciations (down forecasts for the $/€ rat...
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