Market-based forecasting of exchange rates:

Market-based forecasting of exchange rates:

a) does not take into account government interventions.

b) attempts to capture the collective knowledge of sophisticated speculators in the future spot rate of a currency.

c) is based on the premise that “the market knows best.”

d) None of the above

e) All of the above

Answer: All of the above

All of these options are relevant to market-based forecasting.

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