Question: A.Assume there is a regression model that was able to identify the factors which affected exchange rate movements in a recent fouryear period.Also, suppose that

A. Assume there is a regression model that was able to identify the factors which affected exchange rate movements in a recent four‑year period. Also, suppose that the sensitivity of the exchange rate's movements to each factor was precisely quantified. Is there any reason not to expect superior forecasting results from this method in the future? Elaborate.

B. What is the use of detecting a forecast bias?

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A Forecasting Exchange Rates Past Performance Future Success Even though your regression model performed well in the past four years there are reasons to be cautious about expecting superior future re... View full answer

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