Question

Choose the correct sentence. A. Influences of expectations and the constant arrival of news about the influences on supply and​ demand, make​ day-to-day and​ week-to-week changes in the exchange rate difficult to predict. B. Changes in the interest rate​ differential, which generally change the demand for U.S. dollars in the foreign exchange market by more than the​ supply, are difficult to predict because it requires predicting changes in foreign interest rates. C. A movement away from interest rate parity sometimes influences traders to act and sometimes does​ not, and it is difficult to know when traders will react. D. Changes in the expected future exchange rate generally change the supply of U.S. dollars in the foreign exchange market by more than the​ demand, but it is impossible to know by how much.

Answer 1

Answer: A. Influences of expectations and the constant arrival of news about the influences on supply and​ demand, make​ day-to-day and​ week-to-week changes in the exchange rate difficult to predict.

Step-by-step explanation:

Question is what makes exchange rates difficult to predict?