Explain the various exchange rate forecasting techniques. Which forecast technique would you use if you were hired by an MNC to forecast exchange rates?

What is the use of detecting a forecast bias?

Testing for a Forecast Bias. You must determine whether there is a forecast bias in the forward rate. You apply regression analysis to test the relationship between the actual spot rate and the forward rate forecast $($F$)$:

$S=a_0+a_1(F)$

The regression results are as follows:

$\backslash$table$[[$Coefficient$,$Standard error$],[a_0=\mathrm{.}006,\mathrm{.}011],[a_1=\mathrm{.}800,\mathrm{.}05]]$

Based on these results, is there a bias in the forecast? Verify your conclusion. If there is a bias, explain whether it is an overestimate or an underestimate.