On the value of free foreign-exchange forecasts

The objective of this paper is to assess the value of free foreign-exchange forecasts. Taking the exchange-rate projections published by Lloyds Bank as an example, it is shown that there is no reason to assume that these projections consistently outperform the most easily available benchmark, the cu...

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Veröffentlicht in:	Managerial and decision economics 1987-06, Vol.8 (2), p.161-165
1. Verfasser:	Ursprung, Heinrich W.
Format:	Artikel
Sprache:	eng
Schlagworte:	Accuracy Analytical forecasting Business community Currency Economic value Efficient markets Exchange rates Floating exchange rates Forecasting Foreign exchange rates Foreign subsidiaries Forward exchange Free Liras Profit forecasting Profitability Random walk theory Statistical forecasts
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Beschreibung
Zusammenfassung:	The objective of this paper is to assess the value of free foreign-exchange forecasts. Taking the exchange-rate projections published by Lloyds Bank as an example, it is shown that there is no reason to assume that these projections consistently outperform the most easily available benchmark, the current spot exchange rate. Moreover, the returns to speculative investment based on these projections seem to be, at best, insignificant. The value of such forecasts must, therefore, be regarded as negligible.
ISSN:	0143-6570 1099-1468
DOI:	10.1002/mde.4090080210