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You were recently hired by the Doolittle Corporation corporate treasury to help oversee its expansion...

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Accounting

You were recently hired by the Doolittle Corporation corporate treasury to help oversee its expansion into Europe. Blake Francis, the CFO, wants to hire a foreign exchange forecasting company. Blake has asked you to evaluate three different companies, and he has obtained information on their past performances. Out of a total of 50 forecasts for the $/ rate, the companies reported the number of times they correctly forecast appreciations and depreciations. There are a total of 15 dollar appreciations (down periods) and 35 dollar depreciations (up periods) in the sample.

Correct Down Forecasts Correct Up Forecasts
Morrissey Forex Advisors 5 20
Pixie Exchange Land 4 20
FOREX Cures 12 12

According to the HenrikssonMerton test, which firm(s) has (have) market timing ability?

Group of answer choices

According to the HenrikssonMerton test, no firm has market timing ability

Morrissey Forex Advisors

Pixie Exchange Land

FOREX Cures

More than one firm has market timing ability

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