Sulsa Inc. uses fundamental forecasting. Using regression analysis, it has determined the following equation for the euro:

The most recent quarterly percentage change in the inflation differential between the United States and Europe was 2 percent, while the most recent quarterly percentage change in the income growth differential between the United States and Europe was -1 percent. Based on this information, the forecast for the euro is a(n) ____ of ____ percent.
A)appreciation; 3.4
B)depreciation; 3.4
C)appreciation; 0.7
D)appreciation; 1.2

Question

Sulsa Inc. uses fundamental forecasting. Using regression analysis, it has determined the following equation for the euro:

The most recent quarterly percentage change in the inflation differential between the United States and Europe was 2 percent, while the most recent quarterly percentage change in the income growth differential between the United States and Europe was -1 percent. Based on this information, the forecast for the euro is a(n) ____ of ____ percent.
A)appreciation; 3.4 
B)depreciation; 3.4 
C)appreciation; 0.7 
D)appreciation; 1.2

Quizplus · Accepted Answer

The Answer of Sulsa Inc. uses fundamental forecasting. Using regression analysis, it has determined the following equation for the euro:

The most recent quarterly percentage change in the inflation differential between the United States and Europe was 2 percent, while the most recent quarterly percentage change in the income growth differential between the United States and Europe was -1 percent. Based on this information, the forecast for the euro is a(n) ____ of ____ percent.
A)appreciation; 3.4 
B)depreciation; 3.4 
C)appreciation; 0.7 
D)appreciation; 1.2

Sulsa Inc Uses Fundamental Forecasting