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Question
Which of the following observations is true of technical analysis, an approach to exchange rate forecasting?A.It draws on economic theory to construct models for predicting exchange rate movements.
B.The variables contained in this model typically include relative money supply growth rates, inflation rates, and interest rates.
C.There is a sound theoretical rationale for the assumption of predictability underlying this approach.
D.Owing to its drawbacks, this approach has declined in importance over the last few years, giving way to fundamental analysis.
E.It does not rely on a consideration of economic fundamentals.
Answer
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