Suppose that the three month forward Swiss franc to dollar rate is SFr 1 440 per $ The forecast for the three month ahead spot exchange rate by Analyst A is SFrl 410 per $ and the forecast by Analyst B is SFr 1 580 per $ The actual spot rate realized three months later is SFr 1 308 per $ a Which of...

a The absolute values of prediction errors are as follows Forward rate 1440 1308 0132 An ...

Suppose that the three-month forward Swiss franc to dollar rate is SFr 1.440 per $. The forecast

Question:

Suppose that the three-month forward Swiss franc to dollar rate is SFr 1.440 per $. The forecast for the three-month ahead spot by Analyst A is SFrl.410 per $ and the forecast by Analyst B is SFr 1.580 per $. The actual spot rate realized three months later is SFr 1.308 per $.
a. Which of the three forecasts, including the forward rate, is the most accurate?
b. If the spot rate at the time of prediction was SFr 1.420 per $, which analyst(s) correctly predicted the appreciation of Swiss franc relative to the dollar?
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...