Which of the following is true according to the text?
A) The forecast bias of a currency rarely shifts over time.
B) The absolute forecast error as a percentage of the realized value is a good measure to use in detecting a forecast bias.
C) Forecasting errors are smaller when focused on longer term periods.
D) None of these are correct.

Question

Quizplus · Accepted Answer

The statements provided in the options A, B, and C each contain inaccuracies or assumptions that are not universally true. Forecast bias can indeed shift over time due to various factors such as changes in economic conditions, policy adjustments, or unexpected market events. The absolute forecast error as a percentage of the realized value might not always be the best measure for detecting forecast bias, as it does not account for the direction of the error. Additionally, forecasting errors do not necessarily decrease with longer-term forecasts; in many cases, the opposite is true as the uncertainty increases over time.

Which of the Following Is True According to the Text