Why is the actual value of a financial variable different from the optimal forecast of that variable?

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Why is the actual value of a financial variable different from the optimal forecast of that variable? Assuming that expectations are rational, what, on average, will be the difference between the actual value and the optimal forecast?

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Related Book For answer-question

Financial System Of The Economy Principles Of Money And Banking

ISBN: 9780765622464

5th Edition

Authors: Maureen Burton,Bruce Brown

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Question Posted: Nov 28, 2023 12:45 AM

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Why is the actual value of a financial variable different from the optimal forecast of that variable?

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The actual value of a financial variable is different from the optimal forecast of that variable due to several factorsincluding Uncertainty Financial ...View the full answer

Financial System Of The Economy Principles Of Money And Banking

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