1.) Fundamental Forecasting Explain the fundamental technique
for forecasting exchange rates. What are some limitations of using
a fundamental technique to forecast exchange rates?
2.) Market-Based Forecasting Explain the market-based technique
for forecasting exchange rates. What is the rationale for using
market-based forecasts? If the euro appreciates substantially
against the dollar during a specific period, would market-based
forecasts have overestimated or underestimated the realized values
over this period? Explain.
Describe the currency exchange rates for Canada and any
significant economic impacts on the exchange rates.
Analyze the issues around economic exposure, transaction
exposure, and translation exposure.
Recommend to investors whether they should buy or sell futures
or options in Canadian currency. Be sure to support your
recommendation with calculations where necessary.
Concerning exchange rate forecasting, ____ is a common sense
approach based on a wide array of political and economic data.
a
Econometric analysis
b
Technical analysis
c
Judgmental analysis
d
Sunspot analysis