8 Limitations of a fundamental forecast. Wellington Ltd believes that future real interest rate movements will affect

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8 Limitations of a fundamental forecast. Wellington Ltd believes that future real interest rate movements will affect exchange rates, and it has applied regression analysis to historical data to assess the relationship. It will use regression coefficients derived from this analysis, along with forecasted real interest rate movements, to predict exchange rates in the future. Explain at least three limitations of this method.

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Exploring Economics

ISBN: 9780324395464

4th Edition

Authors: Robert L. Sexton

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