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researchers found that it is extremely difficult to forecast the future exchange rates more precisely than the forward exchange rate or the current
explain and derive the international fisher effectanswer the international fisher effect can be acquired by combining the fisher effect and the
on 1 july 2006 goela ltd was registered and offered 1 000 000 ordinary shares to the public at an issue price of 170 payable as follows50c on
explain the implications of the deviations from the purchasing power parity for countriesrsquo competitive positions in the world marketanswer if
one of the well-known soccer clubs in australia sydney has made a decision to include its players on the clubs statement of financial position as
explain the purchasing power parity both of the absolute and relative versions what causes the deviations from the purchasing power parityanswer
explain the conditions under which the forward exchange rate will be an unbiased predictor of the future spot exchange rateanswer the conditions
discuss the implications of the interest rate parity for the exchange rate determinationanswer presume that the forward exchange rate is roughly an
give a full definition of arbitrageanswer arbitrage can be illustrated as the act of concurrently buying and selling the same or equivalent
what is triangular arbitrage what is a condition that will give increase to a triangular arbitrage opportunityanswer triangular arbitrage is
banks find it essential to accommodate their clientrsquos requirements to buy or sell foreign exchange forward in many examples for hedging
why does most interbank currency trading worldwide involve the us dollaranswer trading in currencies worldwide is in opposition to a common
how are foreign exchange transactions between international banks settledanswer a network of correspondent banking relationships is known as the
what is meant by a currency trading at a discount or at a premium in the forward marketanswer the forward market includes contracting today for
describe the balance of payments identity and discuss its implications under the fixed and flexible exchange rate regimesanswer the balance of
as the early 1980s foreign portfolio investors have purchased an important portion of us treasury bond issues discuss the short-term and long-term
explain how to compute the overall balance and discuss its significancethe overall bop is defined by computing the cumulative balance of payments
explain official reserve assets and its major componentsanswer official reserve assets are those financial assets which can be employed as
explain how a country can run an overall balance of payments deficit or surplusanswer a country can run a whole bop balance of payments deficit
define the balance of paymentsanswer the balance of payments that is abbreviated as bop can be defined as the statistical record of a
why would it be useful to examine a countryrsquos balance of payments dataanswer it would be helpful to observe a countryrsquos bop for at least
the united states has experienced continuous current account deficits as the early 1980s what do you think are the major causes for the deficits what
comment on the subsequent statement ldquosince the us imports more than it exports it is essential for the us to import capital from foreign
once capital markets are integrated it is hard for a country to maintain a fixed exchange rate explain why this may be soanswer one time capital
discuss the criteria for a lsquogoodrsquo international monetary systemanswer a good international monetary system must offeri sufficient liquidity