Question: Syracuse Corp. believes that future real interest rate movements will affect exchange rates, and it has applied regression analysis to historical data to assess the

Syracuse Corp. believes that future real interest rate movements will affect exchange rates, and it has applied regression analysis to historical data to assess the relationship. It will use regression coefficients derived from this analysis, along with forecasted real interest rate movements, to predict exchange rates in the future. Explain at least three limitations of this method.

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