The random walk hypothesis suggests that A. the best predictor of the future exchange rate is the current exchange rate. B. the best predictor of the future exchange rate is the current forward rate. C. the best predictors of the future exchange rate are the current exchange rate and the current forward rate. D. none of the options

Question

12-03-2020
Business

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The random walk hypothesis suggests that A. the best predictor of the future exchange rate is the current exchange rate. B. the best predictor of the future exchange rate is the current forward rate. C. the best predictors of the future exchange rate are the current exchange rate and the current forward rate. D. none of the options

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funmilaciousfunmie78 funmilaciousfunmie78 · Answer 1 · 2020-03-16T02:05:21+01:00

Answer:

The random walk hypothesis suggests that the best predictor of the future exchange rate is the current exchange rate - option A is the correct answer choice.

Explanation:

The random walk hypothesis model states that the best predictor for the future exchange rate is today's exchange rate, and the best prediction for the change in the exchange rate is zero.

Therefore, the random walk hypothesis suggests that the best predictor of the future exchange rate is the current exchange rate - option A- is the correct answer choice