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Perfect Forecast Line

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Perfect forecast line
Graph of a slope that matches the forecast of an exchange rate with the actual exchange rate.

Perfect Forecast Line
In foreign exchange, a graphic representation of a forecast exchange rate that meets the actual exchange rate over a given set of periods. It is calculated as the slope of a forecasted exchange rate against the actual exchange rate. The forecasted exchange rates at given periods are usually also put on the graph; the closer the forecasted exchange rates are to the perfect forecast line, the better the predictions. The perfect forecast line is a prime tool used to evaluate the performance of future exchange rates forecasts.


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