"The herd instinct among forecasters makes sheep look like independent thinkers." by Edgar R. Feidler Discuss...

"The herd instinct among forecasters makes sheep look like independent thinkers." by Edgar R. Feidler

Discuss this quotation in terms of foreign exchange rate determination.

Solutions

Expert Solution

This quotation in terms of foreign exchange rate determinationmeans that sentiment can be valuable when there is a need todetermine, analyze and evaluate trends that exist in the foreignexchange marketplace. But the quote suggests that while thesentiments can be useful for determining and evaluating trends itcan also lead to a downside. This happens when the consensusherds to one side. In case of herding of consensus with regardsto foreign exchange rate movements the herd is usually and in mostcases wrong.

When it comes to foreign exchange rate determination often manyanalysts and forecasters makes use of herd instinct by adhering tothe general consensus. They will predict the foreign exchange ratemovements in that direction which is being predicted by most otheranalysts. This is done without proper technical analysis andfundamental analysis. Such analysts often end up making wrongprediction and the foreign exchange rate movement as predicted bythem is usually far from accurate.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

"The herd instinct among forecasters makes sheep look like independent thinkers." by Edgar R. Feidler. Discuss...

"The herd instinct among forecasters makes sheep look like independent thinkers." by Edgar R. Feidler. Discuss this quotation in terms of foreign exchange rate determination.

I would like you to discuss the current state of the economy and whether forecasters are...

I would like you to discuss the current state of the economy and whether forecasters are predicting that the economy will continue to expand or whether a recession is coming. You can compare such forecasts to what is implied by the term spread. There is no right or wrong answer but feel free to speak your mind.

1. Assume the following recursive formula: R(n)=R(n-1)nn where R(0)=1 The code might look like this: public double...

1. Assume the following recursive formula: R(n)=R(n-1)*n*n where R(0)=1 The code might look like this: public double R(n) { If n==0 return 1 else return R(n-1); } a. What is the recurrence relation showing the number of multiplications for the recursive function R(n) and program? b. Solve the recurrence relation. 2. Show the following is true for all integers n > 1 using mathematical induction: 3. Sort the following list into alphabetical order using selection sort. Write the list showing the swapped...

Discuss the relevance of corporate governance. What does it look like? How can a company benefit...

Discuss the relevance of corporate governance. What does it look like? How can a company benefit from governance systems; i.e. what benefits are provided to decision makers? Provide an industry example of corporate governance that you have been involved in from research.

1. For a two-tailed, independent samples t-test, the alternative hypothesis would look like μ1−μ2≠0, whereas the...

1. For a two-tailed, independent samples t-test, the alternative hypothesis would look like μ1−μ2≠0, whereas the null hypothesis would look like μ1−μ2=0. True or False? 2. When the null hypothesis is true, the mean of the sampling distribution of differences between means is equal to the mean of the population that the samples represent. True or False? 3. In a related-samples t-test, if there is no treatment effect we expect that μD will equal 0 (zero). True or False?

1.Discuss what makes people behave unethical in an organizational environment? 2.Discuss what you know and like...

1.Discuss what makes people behave unethical in an organizational environment? 2.Discuss what you know and like about Planning and Budgeting.

Subjects

Question