Interest rate parity for determination of the exchange rate
Describe the allegations of interest rate parity for the determination of the exchange rate.
Expert
Supposing that the forward exchange rate is approximately an unbiased predictor of future spot rate, IRP is written as:
S = [(1 + I£)/(1 + I$)]E[St+1?It].
Exchange rate is therefore estimated by relative interest rates, and expected future spot rate, conditional on the available information, It, as of the present time. One therefore may say that the expectation is self-fulfilling. As information set will be constantly updated as soon as the news comes in the market, exchange rate will display the highly dynamic, random behavior.
List some factors which are responsible for recent surge in the international portfolio investment (IPI)?
What is Freight-in and what are its conditions?
Why it would be useful to examine a balance of payments of the country data?
Give me answer of this question. The prime interest rate usually: A) rises when the Federal funds rate rises. B) rises when the discount rate falls. C) falls when the Federal funds rate rises. D) falls when the Fed sells bonds in the open market
What is Purchase. Briefly state the definition of it?
State the characteristics of the Composite currency bonds market instrument.
What is the difference among personal or real account and nominal account?
Specify some of the methods taxing authorities utilize to remove or diminish evil of double taxation?
Explain the difference between Retail Invoice vs. Tax Invoice?
What are the dimensions of creativity in the Creative Field ?
18,76,764
1931610 Asked
3,689
Active Tutors
1454604
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!