Measuring Forecast Accuracy You are hired as a consultant to assess a firm’s ability to forecast. The firm has developed a point forecast for two different currencies presented in the following table. The firm asks you to determine which currency was forecasted with greater accuracy. PERIOD YEN FORECAST ACTUALYEN VALUE POUND FORECAST ACTUAL POUND VALUE 1 $.0050 $.0051 $1.50 $1.51 2 .0048 .0052 1.53 1.50 3 .0053 .0052 1.55 1.58 4 .0055 .0056 1.49 1.52
Measuring Forecast Accuracy You are hired as a consultant to assess a firm’s ability to forecast. The firm has developed a point forecast for two different currencies presented in the following table. The firm asks you to determine which currency was forecasted with greater accuracy. PERIOD YEN FORECAST ACTUALYEN VALUE POUND FORECAST ACTUAL POUND VALUE 1 $.0050 $.0051 $1.50 $1.51 2 .0048 .0052 1.53 1.50 3 .0053 .0052 1.55 1.58 4 .0055 .0056 1.49 1.52
Chapter9: Forecasting Exchange Rates
Section: Chapter Questions
Problem 5BIC
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Question
Measuring
You are hired as a consultant to assess a firm’s ability to forecast. The firm has developed a point forecast for two different currencies presented in the following table. The firm asks you to determine which currency was forecasted with greater accuracy.
PERIOD |
YEN FORECAST |
ACTUALYEN VALUE |
POUND FORECAST |
ACTUAL POUND VALUE |
1 |
$.0050 |
$.0051 |
$1.50 |
$1.51 |
2 |
.0048 |
.0052 |
1.53 |
1.50 |
3 |
.0053 |
.0052 |
1.55 |
1.58 |
4 |
.0055 |
.0056 |
1.49 |
1.52 |
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