44.A regression analysis of the Australian dollar value on the inflation differential between the U.S. and Australia produced a coefficient of .8. Thus, for every 1% increase in the inflation differential, the Australian dollar is expected to depreciate by .8%.a. Trueb. FalseANS: F
PTS:145.The most sophisticated forecasting techniques provide consistently accurate forecasts.
PTS:146.If the forward rate is used as an indicator of the future spot rate, the spot rate is expected to appreciate or depreciate by the same amount as the forward premium or discount, respectively.
PTS:147.Research indicates that currency forecasting services almost always outperform forecasts based on the forward rate.
PTS:148.When measuring forecast performance of different currencies, it is often useful to adjust for their relative sizes. Thus, percentages, rather than nominal amounts, are often used to compute forecast errors.a. Trueb. FalseANS: T
PTS:149.The closer graphical points are to the perfect forecast line, the better is the forecast.
PTS:150.Foreign exchange markets appear to be strong-form efficient.