1) Explain the factors that are relevant in trying to explain how to determine exchange rates. Why do you feel it is so difficult to forecast interest rate?
Ans : The factor that are relevant in determining the interest exchange rate are
As there are Uncertainty in international market causing a lot of fluctuation in the investment and international trade causing increase or decrease in the flow of money and in turn it impact on the interest vice versa. Change in domestic market conditions like availability of loans loans, consumption and production. Employment rate and Inflation rate Financial Frauds of large scale may wipe the savings from economy and change in the interest rate in the exchange because of this it is difficult to predict the interest rate.
1) Explain the factors that are relevant in trying to explain how to determine exchange rates....
Explain the factors that are relevant in trying to explain how to determine exchange rates. Why do you feel it is so difficult to forecast interest rates?
Explain the factors affecting exchange rates in a floating exchange rate system. (more details)
5. Understand the factors that affect exchange rates. a) Be able to determine what would happen to each currency in a currency pair for changes in the different factors. e.g. if the Canadian income level decreased, while the U.S. income level remained the same, you would you expect the Canadian dollar to against the U.S. dollar. Why?
Determination of exchange rates depends on factors causing fluctuations. Explain why and its effect on US dollar Distinguish between DER & IER.
explain the factors that determine the Euro/US exchange rate in the Foreign exchange market in recent years?
Which factors affect the exchange rates of the Australian dollar with respect to US dollar in terms of the monetary theory of exchange rate. Why the monetary theory is deficient?
Explain how interest rates, inflation, and market psychology affect foreign exchange. How can organizations protect themselves from foreign exchange volatility. Apply to any currency of your choice. When referring to interest rate, please differentiate real interest rates from nominal interest rates, short-term vs. long-term effect.
Topic 1. Fundamental Analysis We studied that there are three ways to forecast exchange rates. In this thread, I would like to discuss fundamental analysis. Some issues to consider: What types of determinants do you think are important in terms of exchange rates? Where could we get measures of those determinants in practice? Are there macroeconomic variables that are more important than others for the determination of exchange rates? Do you think it is harder/easier to forecast fixed or flexible...
Analyze the main factors affecting exchange rates. In your answer refer to PPP and interest rate parity.
1. What is the cost of money, and how is it determined? What factors affect the cost of money? 2. What is a yield curve? Why do yield curves differ? 3. Discuss the explanations for various shapes of yield curves. How can yield curves by used to forecast future interest rates? How does the Federal Reserve change the money supply in the United States? What actions would the Fed take to increase interest (decrease) rates? 5. How does general business...