Question: Consider an MNC that uses market-based forecasting to estimate future exchange rates. Note : Assumeefrepresents the percentage change in the value of currency of interest.

Consider an MNC that uses market-based forecasting to estimate future exchange rates.

Note: Assumeefrepresents the percentage change in the value of currency of interest.

If an MNC uses the current spot rate of a currency as its forecast for the future spot rate of that currency, then it must assume that thatE(ef)<0

False

True

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