#1
What is the primary objective of Foreign Exchange Rate Forecasting?
To predict future exchange rates
ExplanationPredicting future currency values.
#2
Which of the following is a fundamental analysis method for Foreign Exchange Rate Forecasting?
Interest Rate Parity
ExplanationAnalyzing interest rate differentials.
#3
What does the Purchasing Power Parity (PPP) theory suggest about exchange rates?
Exchange rates are determined by inflation differentials
ExplanationInflation's impact on currency values.
#4
Which economic indicator is commonly used in technical analysis for Foreign Exchange Rate Forecasting?
Moving Average Convergence Divergence (MACD)
ExplanationUtilizing MACD for analysis.
#5
What role do interest rates play in the Relative Strength Index (RSI) as a Foreign Exchange Rate Forecasting tool?
They indicate overbought or oversold conditions
ExplanationInterest rates signaling market conditions.
#6
Which economic factor is considered in the Interest Rate Parity theory for Foreign Exchange Rate Forecasting?
Interest rate differentials
ExplanationFactoring interest rate variances.
#7
Which technique uses historical price data to identify patterns and trends for Foreign Exchange Rate Forecasting?
Technical Analysis
ExplanationAnalyzing past price movements.
#8
What is the primary limitation of the Random Walk Theory in Foreign Exchange Rate Forecasting?
It assumes past movements are indicative of future movements
ExplanationRelying solely on historical data.
#9
In Foreign Exchange Rate Forecasting, what is the primary purpose of using regression analysis?
To estimate the impact of economic variables on exchange rates
ExplanationEvaluating economic variable effects.
#10
Which of the following is a technical indicator used for short-term Foreign Exchange Rate Forecasting?
Bollinger Bands
ExplanationEmploying Bollinger Bands for short-term analysis.
#11
What is the primary drawback of relying solely on technical analysis in Foreign Exchange Rate Forecasting?
It may not account for sudden market changes
ExplanationIgnoring abrupt market shifts.