2. Consider the following information: CURRENCY Canadian dollar Japanese yen 90-DAY FORWARD RATE $0.80 $0.012 SPOT...

 

Transcribed Image Text:

2. Consider the following information: CURRENCY Canadian dollar Japanese yen 90-DAY FORWARD RATE $0.80 $0.012 SPOT RATE THAT OCCURRED 90 DAYS LATER $0.82 $0.011 Assuming the forward rate was used to forecast the future spot rate, determine whether the Canadian dollar or the Japanese yen was forecasted with more accuracy, based on the absolute forecast error as a per- centage of the realized value. 2. Consider the following information: CURRENCY Canadian dollar Japanese yen 90-DAY FORWARD RATE $0.80 $0.012 SPOT RATE THAT OCCURRED 90 DAYS LATER $0.82 $0.011 Assuming the forward rate was used to forecast the future spot rate, determine whether the Canadian dollar or the Japanese yen was forecasted with more accuracy, based on the absolute forecast error as a per- centage of the realized value.

Answer rating: 100% (QA)

determine which currency was forecasted with more accuracy we need to calculate the absolute forecas... View the full answer