Question: Discuss the different methods that are used to forecast exchange rate movements. Which method is the best and explain why? How does Purchasing Power Parity

Discuss the different methods that are used to forecast exchange rate movements. Which method is the best and explain why? How does Purchasing Power Parity influence exchange rate movements and why in the long run? Explain how you can use Arbitrage in the foreign exchange markets to make a riskless profit? Why is Arbitrage traders are good for the foreign exchange market.

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