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

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter4: Exchange Rate Determination
Section: Chapter Questions
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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

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