International Finance
|
|
|
- Duane Taylor
- 6 years ago
- Views:
Transcription
1 International Finance Review of previous lecture January 16, 2018 Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
2 Exchange rate Bilateral; e.g., dollar per euro or euro per dollar Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
3 Exchange rate Bilateral; e.g., dollar per euro or euro per dollar Convention we follow: Home currency per unit of foreign currency. For US Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
4 Exchange rate Bilateral; e.g., dollar per euro or euro per dollar Convention we follow: Home currency per unit of foreign currency. For US dollar per euro Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
5 Exchange rate Bilateral; e.g., dollar per euro or euro per dollar Convention we follow: Home currency per unit of foreign currency. For US dollar per euro dollar per yen Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
6 Exchange rate Bilateral; e.g., dollar per euro or euro per dollar Convention we follow: Home currency per unit of foreign currency. For US dollar per euro dollar per yen Dollar per euro is inverse of euro per dollar E $/euro = 1 E euro/$ Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
7 Exchange rate Bilateral; e.g., dollar per euro or euro per dollar Convention we follow: Home currency per unit of foreign currency. For US dollar per euro dollar per yen Dollar per euro is inverse of euro per dollar The rate of depreciation (%) E $/euro = 1 E euro/$ 100 E t+1 E t E t = 100 E E Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
8 Examples Question 1. E t = 1.1; E t+1 = 1.05; the rate of depreciation = 4.5% Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
9 Examples Question 1. E t = 1.1; E t+1 = 1.05; the rate of depreciation How about the annual rate? = 4.5% Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
10 Examples Question 1. E t = 1.1; E t+1 = 1.05; the rate of depreciation How about the annual rate? = 4.5% A negative rate means that the dollar appreciated... Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
11 Examples Question 1. E t = 1.1; E t+1 = 1.05; the rate of depreciation How about the annual rate? = 4.5% A negative rate means that the dollar appreciated... This of course is a result of the convention. We express exchange rate as dollar per euro; in three months we need less dollars to buy the same euro. Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
12 Examples Question 1. E t = 1.1; E t+1 = 1.05; the rate of depreciation How about the annual rate? = 4.5% A negative rate means that the dollar appreciated... This of course is a result of the convention. We express exchange rate as dollar per euro; in three months we need less dollars to buy the same euro. Euro became cheaper, i.e., Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
13 Examples Question 1. E t = 1.1; E t+1 = 1.05; the rate of depreciation How about the annual rate? = 4.5% A negative rate means that the dollar appreciated... This of course is a result of the convention. We express exchange rate as dollar per euro; in three months we need less dollars to buy the same euro. Euro became cheaper, i.e., dollar became expensive, i.e., Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
14 Examples Question 1. E t = 1.1; E t+1 = 1.05; the rate of depreciation How about the annual rate? = 4.5% A negative rate means that the dollar appreciated... This of course is a result of the convention. We express exchange rate as dollar per euro; in three months we need less dollars to buy the same euro. Euro became cheaper, i.e., dollar became expensive, i.e., dollar appreciated. Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
15 Examples How about euro vis à vis dollar? Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
16 Examples How about euro vis à vis dollar? Answer: depreciated Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
17 Examples How about euro vis à vis dollar? Answer: depreciated by how much? 4.5%? Approximately? Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
18 Examples How about euro vis à vis dollar? Answer: depreciated by how much? 4.5%? Approximately? Question 2. From euro area perspective, E t = ; E t+1 = = 4.76% Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
19 Multilateral exchange rates US trades with many countries. How do we get an overall picture of dollar s strength/weakness? Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
20 Multilateral exchange rates US trades with many countries. How do we get an overall picture of dollar s strength/weakness? Use trade weights. Suppose US trades with two countries/continents, China and euro area, with trade volumes Trade 1 and Trade 2. Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
21 Multilateral exchange rates US trades with many countries. How do we get an overall picture of dollar s strength/weakness? Use trade weights. Suppose US trades with two countries/continents, China and euro area, with trade volumes Trade 1 and Trade 2. Then trade shares with China and Euro area are, respectively T 1 T 2 and T 1 + T 2 T 1 + T 2 Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
22 Multilateral exchange rates US trades with many countries. How do we get an overall picture of dollar s strength/weakness? Use trade weights. Suppose US trades with two countries/continents, China and euro area, with trade volumes Trade 1 and Trade 2. Then trade shares with China and Euro area are, respectively T 1 To get a multilateral index use T 2 and T 1 + T 2 T 1 + T 2 T 1 T 1 + T 2 E 1 E 1 + T 2 T 1 + T 2 E 2 E 2 Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
23 Multilateral exchange rates Question 3: E 1 E 1 = 10; E 2 E 2 = 4.5 Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
24 Multilateral exchange rates E Question 3: 1 E 1 = 10; E 2 E 2 = 4.5 trade shares T 1 T = 0.4; 1 = 0.6 T 1 + T 2 T 1 + T 2 Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
25 Multilateral exchange rates E Question 3: 1 E 1 = 10; E 2 E 2 = 4.5 trade shares T 1 T = 0.4; 1 = 0.6 T 1 + T 2 T 1 + T 2 Effective depreciation E eff E eff = 6.7% Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
26 Comparing prices What if the exchange rate moves to 1.25 $/pound, i.e., dollar appreciates Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
27 Comparing prices What if the exchange rate moves to 1.25 $/pound, i.e., dollar appreciates In UK the jeans now cost only = 37.5$ Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
28 Comparing prices What if the exchange rate moves to 1.25 $/pound, i.e., dollar appreciates In UK the jeans now cost only = 37.5$ For a British person, US jeans now cost 45 = 36 pounds 1.25 Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
29 Comparing prices What if the exchange rate moves to 1.25 $/pound, i.e., dollar appreciates In UK the jeans now cost only = 37.5$ For a British person, US jeans now cost 45 = 36 pounds 1.25 When dollar appreciates US goods become expensive and vice versa.. Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
30 Arbitrage example Exchange rates are E $/pound = ; E $/euro = Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
31 Arbitrage example Exchange rates are E $/pound = ; E $/euro = The question is E euro/pound? Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
32 Arbitrage example Exchange rates are E $/pound = ; E $/euro = The question is E euro/pound? 1 You are a US person. Use a dollar to buy 1 another dollar to buy euros pounds and use Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
33 Arbitrage example Exchange rates are The question is E euro/pound? E $/pound = ; E $/euro = You are a US person. Use a dollar to buy pounds and use 1 another dollar to buy euros. Since you spent the same amount of dollar for the two transactions, arbitrage requires that pounds = euros Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
34 Arbitrage example Exchange rates are The question is E euro/pound? E $/pound = ; E $/euro = You are a US person. Use a dollar to buy pounds and use 1 another dollar to buy euros. Since you spent the same amount of dollar for the two transactions, arbitrage requires that Or pounds = euros = euros/pound = euros/pound Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
35 Arbitrage example Suppose not. Suppose the direct exchange rate is 1.2 euros/pound. 1 Then use a dollar to buy pounds and then sell it in the direct 1.2 exchange market to get euros Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
36 Arbitrage example Suppose not. Suppose the direct exchange rate is 1.2 euros/pound. 1 Then use a dollar to buy pounds and then sell it in the direct 1.2 exchange market to get 1.2 Then sell euros to get euros = $ Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
37 Arbitrage example Suppose not. Suppose the direct exchange rate is 1.2 euros/pound. 1 Then use a dollar to buy pounds and then sell it in the direct 1.2 exchange market to get 1.2 Then sell euros to get euros = $ You made a cool 6.78% profit instantaneously. Why not use billions of dollars to get rich? Review of previous lecture () Econ 457 Spring 2018 January 16, / 9
Study Questions. Lecture 13. Exchange Rates
Study Questions Page 1 of 5 Study Questions Lecture 13 Part 1: Multiple Choice Select the best answer of those given. 1. The statement the yen rose today from 121 to 117 makes sense because a. The U.S.
Study Questions (with Answers) Lecture 13. Exchange Rates
Study Questions (with Answers) Page 1 of 5 Part 1: Multiple Choice Select the best answer of those given. Study Questions (with Answers) Lecture 13 1. The statement the yen rose today from 121 to 117 makes
Study Questions (with Answers) Lecture 13. Exchange Rates
Study Questions (with Answers) Page 1 of 5 Part 1: Multiple Choice Select the best answer of those given. Study Questions (with Answers) Lecture 13 1. The statement the yen rose today from 121 to 117 makes
Study Questions. Lecture 13. Exchange Rates
Study Questions Page 1 of 5 Part 1: Multiple Choice Select the best answer of those given. Study Questions Lecture 13 1. The statement the yen rose today from 121 to 117 makes sense because a. The U.S.
Rutgers University Spring Econ 336 International Balance of Payments Professor Roberto Chang. Problem Set 1. Name:
Rutgers University Spring 2013 Econ 336 International Balance of Payments Professor Roberto Chang Problem Set 1 Name: 1. When the exchange value of the euro rises in terms of the U.S. dollar, U.S. residents
Econ 340. Forms of Exchange Rates. Forms of Exchange Rates. Forms of Exchange Rates. Forms of Exchange Rates. Outline: Exchange Rates
Econ 34 Lecture 13 In What Forms Are Reported? What Determines? Theories of 2 Forms of Forms of What Is an Exchange Rate? The price of one currency in terms of another Examples Recent rates for the US
The Foreign Exchange Market
The Foreign Exchange Market Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The market in which foreign currencies are traded is known as the: A. stock
3. If the price of a British pound increases from $1.50 per pound to $1.80 per pound, we say that:
HOMEWORK 7 (ON CHAPTERS 14 AND 15) ECO41 FALL 2015 UDAYAN ROY Each correct answer is worth 1 point. The maximum score is 20 points. This homework is due in class on Wednesday, December 2. Please show your
Rutgers University Spring Econ 336 International Balance of Payments Professor Roberto Chang. Problem Set 2. Deadline: March 1st.
Rutgers University Spring 2012 Econ 336 International Balance of Payments Professor Roberto Chang Problem Set 2. Deadline: March 1st Name: 1. The law of one price works under some assumptions. Which of
Open-Economy Macroeconomics: Basic Concepts
Lesson 10 Open-Economy Macroeconomics: Basic Concepts Henan University of Technology Sino-British College Transfer Abroad Undergraduate Programme 0 In this lesson, look for the answers to these questions:
Preview. Chapter 13. Depreciation and Appreciation. Definitions of Exchange Rates. Exchange Rates and the Foreign Exchange Market: An Asset Approach
Chapter 13 Exchange Rates and the Foreign Exchange Market: An Asset Approach Preview The basics of exchange rates Exchange rates and the prices of goods The foreign exchange markets The demand for currency
Professor Christina Romer. LECTURE 25 EXCHANGE RATES AND THE BALANCE OF PAYMENTS April 24, 2018
Economics 2 Spring 2018 Professor Christina Romer Professor David Romer LECTURE 25 EXCHANGE RATES AND THE BALANCE OF PAYMENTS April 24, 2018 I. OVERVIEW OF INTERNATIONAL MACROECONOMICS A. Building blocks
Professor Christina Romer. LECTURE 25 EXCHANGE RATES AND THE BALANCE OF PAYMENTS April 24, 2018
Economics 2 Spring 2018 Professor Christina Romer Professor David Romer LECTURE 25 EXCHANGE RATES AND THE BALANCE OF PAYMENTS April 24, 2018 I. OVERVIEW OF INTERNATIONAL MACROECONOMICS A. Building blocks
FOREIGN EXCHANGE MARKET. Luigi Vena 05/08/2015 Liuc Carlo Cattaneo
FOREIGN EXCHANGE MARKET Luigi Vena 05/08/2015 Liuc Carlo Cattaneo TABLE OF CONTENTS The FX market Exchange rates Exchange rates regimes Financial balances International Financial Markets 05/08/2015 Coopeland
Homework Assignment #2, part 1 ECO 3203, Fall According to classical macroeconomic theory, money supply shocks are neutral.
Homework Assignment #2, part 1 ECO 3203, Fall 2017 Due: Friday, October 27 th at the beginning of class. 1. According to classical macroeconomic theory, money supply shocks are neutral. a. Explain what
LECTURE XIII. 30 July Monday, July 30, 12
LECTURE XIII 30 July 2012 TOPIC 15 Exchange Rates BIG PICTURE How do we evaluate currency across countries? How is the exchange rate determined? What is the relationship of the foreign exchange market
a) Answer parts (i)-(iii) assuming the following exchange rates hold: Exchange Rate (as US$ per foreign currency)
Econ 455 Lapan Spring 2001 FINAL EXAM Answer a total of three questions. Answer at most one question from Part II. {answer three questions from Part I or answer 2 questions from Part I and one question
Midterm - Economics 160B, Spring 2012 Version A
Name Student ID Section (or TA) Midterm - Economics 160B, Spring 2012 Version A You will have 75 minutes to complete this exam. There are 6 pages and 111 points total. Good luck. Multiple choice: Mark
Management of Transaction Exposure
INTERNATIONAL FINANCIAL MANAGEMENT Seventh Edition EUN / RESNICK 8-0 Copyright 2015 by The McGraw-Hill Companies, Inc. All rights reserved. Management of Transaction Exposure 8 Chapter Eight INTERNATIONAL
Final Examination Semester 3 / Year 2012
Final Examination Semester 3 / Year 2012 COURSE : MACROECONOMICS COURSE CODE : ECON1013 TIME : 2 1/2 HOURS DEPARTMENT : MANAGEMENT LECTURER : CHING YANN PENG Student s ID : Batch No. : Notes to candidates:
Management of Transaction Exposure
INTERNATIONAL FINANCIAL MANAGEMENT Seventh Edition EUN / RESNICK 8-0 Copyright 2015 by The McGraw-Hill Companies, Inc. All rights reserved. Management of Transaction Exposure 8 Chapter Eight INTERNATIONAL
INTERNATIONAL FINANCE TOPIC
INTERNATIONAL FINANCE 11 TOPIC The Foreign Exchange Market The dollar ($), the euro ( ), and the yen ( ) are three of the world s monies and most international payments are made using one of them. But
Chapter 31 Open Economy Macroeconomics Basic Concepts
Chapter 31 Open Economy Macroeconomics Basic Concepts 0 In this chapter, look for the answers to these questions: How are international flows of goods and assets related? What s the difference between
A) decrease; decrease B) decrease; not change C) decrease; increase D) increase; decrease E) not change; increase
Multiple Choice: On your answer sheet darken in the letter of your choice for each question. You should choose the suggested answer that BEST complete the statement or answers the question. 1) Suppose
Arbitrage is a trading strategy that exploits any profit opportunities arising from price differences.
5. ARBITRAGE AND SPOT EXCHANGE RATES 5 Arbitrage and Spot Exchange Rates Arbitrage is a trading strategy that exploits any profit opportunities arising from price differences. Arbitrage is the most basic
INTRODUCTION TO EXCHANGE RATES AND THE FOREIGN EXCHANGE MARKET
INTRODUCTION TO EXCHANGE RATES AND THE FOREIGN EXCHANGE MARKET 13 1 Exchange Rate Essentials 2 Exchange Rates in Practice 3 The Market for Foreign Exchange 4 Arbitrage and Spot Exchange Rates 5 Arbitrage
Demand and Supply Shifts in Foreign Exchange Markets *
OpenStax-CNX module: m57355 1 Demand and Supply Shifts in Foreign Exchange Markets * OpenStax This work is produced by OpenStax-CNX and licensed under the Creative Commons Attribution License 4.0 By the
Prepared by Iordanis Petsas To Accompany. by Paul R. Krugman and Maurice Obstfeld
Chapter 13 Exchange Rates and the Foreign Exchange Market: An Asset Approach Prepared by Iordanis Petsas To Accompany International Economics: Theory and Policy, Sixth Edition by Paul R. Krugman and Maurice
Lecture 4. Types of Exchange Arrangements Rates of Exchange
Lecture 4 Types of Exchange Arrangements Rates of Exchange The major part of speculations is executed on the Forex market. Being a global market, Forex does not have a fixed place of trading and represents
Introduction to Exchange Rates and the Foreign Exchange Market
Introduction to Exchange Rates and the Foreign Exchange Market 2 1. Refer to the exchange rates given in the following table. Today One Year Ago June 25, 2010 June 25, 2009 Country Per $ Per Per Per $
Chapter 8 Outline. Transaction exposure Should the Firm Hedge? Contractual hedge Risk Management in practice
Chapter 8 Outline Transaction exposure Should the Firm Hedge? Contractual hedge Risk Management in practice 1 / 51 Transaction exposure Transaction exposure measures gains or losses that arise from the
2. Interest rates in the United States rise faster than interest rates in Canada.
Exchange Rates Interaction Between Currencies When Americans buy more foreign goods, U.S. dollars are sold in the international currency market to purchase foreign currencies that are used to pay producers
Week 5. Options: Basic Concepts
Week 5 Options: Basic Concepts Definitions (1/2) Although, many different types of options, some quite exotic, have been introduced into the market, we shall only deal with the simplest plain-vanilla options
Hedge Fund Survey Results (2006)
(Provisional Translation) Hedge Fund Survey Results (2006) March 2007 Financial Services Agency, Government of Japan CONTENTS Introduction 1 1 Survey Results (2006) 2 (1) Survey results for investments
Final Examination Semester 2 / Year 2012
Final Examination Semester 2 / Year 2012 COURSE : MACROECONOMICS COURSE CODE : ECON1013 TIME : 2 1/2 HOURS DEPARTMENT : MANAGEMENT LECTURER : CHING YANN PENG Student s ID : Batch No. : Notes to candidates:
Money, prices and exchange rates in the long run
Money, prices and exchange rates in the long run Outline Part I: Money and inflation 1. Definition of money 2. Money supply and money demand 3. The neutrality of money 4. The dichotomy principle and its
Currency Option Combinations
APPENDIX5B Currency Option Combinations 160 In addition to the basic call and put options just discussed, a variety of currency option combinations are available to the currency speculator and hedger.
Net Exports and Capital Flows: Linking Financial and Goods Markets
ACTIVITY 7-5 Net Exports and Capital Flows: Linking Financial and Goods Markets The term capital flow refers to the movement of financial capital (money) between economies. Capital inflows consist of foreign
Quoting an exchange rate. The exchange rate. Examples of appreciation. Currency appreciation. Currency depreciation. Examples of depreciation
The exchange rate The nominal exchange rate (or, for short, exchange rate) between two currencies is the price of one currency in terms of the other. It allows domestic purchasing power to be spent abroad.
ECO 328 SUMMER Sample Questions Topics I.1-3. I.1 National Income Accounting and the Balance of Payments
ECO 328 SUMMER 2004--Sample Questions Topics I.1-3 I.1 National Income Accounting and the Balance of Payments 1. National income equals GNP A. less depreciation, less net unilateral transfers, less indirect
Nominal exchange rate
Nominal exchange rate The nominal exchange rate between two currencies is the price of one currency in terms of the other. The nominal exchange rate (or, for short, exchange rate) will be denoted by the
Study Questions. Lecture 15 International Macroeconomics
Study Questions Page 1 of 5 Study Questions Lecture 15 International Macroeconomics Part 1: Multiple Choice Select the best answer of those given. 1. If the aggregate supply and demand curves in the figure
1. Labor intensity and Labor abundance (explain with help of an example)
ECON 3500 Final Exam Curtis Miller 00693330 I. Compare and contrast (5 points each.) 1. Labor intensity and Labor abundance (explain with help of an example) Labor intensity is the amount of a labor a
Exam 2 Sample Questions FINAN430 International Finance McBrayer Spring 2018
Sample Multiple Choice Questions 1. Suppose you observe a spot exchange rate of $1.0500/. If interest rates are 5% APR in the U.S. and 3% APR in the euro zone, what is the no-arbitrage 1-year forward rate?
Chapter 14 Exchange Rates and the Foreign Exchange Market: An Asset Approach
Chapter 14 Exchange Rates and the Foreign Exchange Market: An Asset Approach Copyright 2015 Pearson Education, Inc. All rights reserved. 1-1 Preview The basics of exchange rates Exchange rates and the
Chapter 18 - Openness in Goods and Financial Markets
Chapter 18 - Openness in Goods and Financial Markets Openness has three distinct dimensions: 1. Openness in goods markets. Free trade restrictions include tari s and quotas. 2. Openness in nancial markets.
Name Student ID Summer Session II Midterm ECON160B There are 7 pages and 100 points. You have 100 minutes to complete the exam.
Name Student ID Summer Session II 2013 Midterm ECON160B There are 7 pages and 100 points. You have 100 minutes to complete the exam. Multiple Choice Choose the best answer. (2.5 points each, 30 points
Chapter 6. Government Influence on Exchange Rates. Lecture Outline
Chapter 6 Government Influence on Exchange Rates Lecture Outline Exchange Rate Systems Fixed Exchange Rate System Freely Floating Exchange Rate System Managed Float Exchange Rate System Pegged Exchange
Management of Transaction Exposure
INTERNATIONAL FINANCIAL MANAGEMENT Seventh Edition EUN / RESNICK Management of Transaction Exposure 8 Chapter Eight INTERNATIONAL Chapter Objective: FINANCIAL MANAGEMENT This chapter discusses various
Lecture 9: Exchange rates
BURNABY SIMON FRASER UNIVERSITY BRITISH COLUMBIA Paul Klein Office: WMC 3635 Phone: (778) 782-9391 Email: paul klein 2@sfu.ca URL: http://paulklein.ca/newsite/teaching/305.php Economics 305 Intermediate
Use the following to answer questions 19-20: Scenario: Exchange Rates The value of a euro goes from US$1.25 to US$1.50.
Name: Date: 1. Open-economy macroeconomics is the branch of economics that deals with: A) reducing regulations on business. B) the relationships between economies of different nations. C) reducing employment
The exam will be closed book and notes; only the following calculators will be permitted: TI-30X IIS, TI-30X IIB, TI-30Xa.
21-270 Introduction to Mathematical Finance D. Handron Exam #1 Review The exam will be closed book and notes; only the following calculators will be permitted: TI-30X IIS, TI-30X IIB, TI-30Xa. 1. (25 points)
Exemplar for Internal Assessment Resource Economics Level 2. Resource title: Where are we headed on the business cycle?
Exemplar for internal assessment resource Economics 2.5B for Achievement Standard 91226 Exemplar for Internal Assessment Resource Economics Level 2 Resource title: Where are we headed on the business cycle?
Economics 452 International Trade Theory and Policy Spring 2014
blue FINAL EXAM Economics 452 International Trade Theory and Policy Spring 2014 FOREIGN DIRECT INVESTMENT 1. Foreign outsourcing is a) considered illegal in the United States b) an example of internalization
ANALYSIS. Trade & Balance of Payments. Suppose the Belgian government decreases a tariff on all the automobiles it imports from abroad.
ANALYSIS Trade & Balance of Payments Suppose the Belgian government decreases a tariff on all the automobiles it imports from abroad. A) Will each of the following groups benefit from this action? Explain.
MTP_Final_Syllabus 2016_Dec2017_Set 2 Paper 14 Strategic Financial Management
Paper 14 Strategic Financial Management Academics Department, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 1 Paper 14 Strategic Financial Management Full
Lecture 2. Agenda: Basic descriptions for derivatives. 1. Standard derivatives Forward Futures Options
Lecture 2 Basic descriptions for derivatives Agenda: 1. Standard derivatives Forward Futures Options 2. Nonstandard derivatives ICON Range forward contract 1. Standard derivatives ~ Forward contracts:
Exchange rate and interest rates. Rodolfo Helg, February 2018 (adapted from Feenstra Taylor)
Exchange rate and interest rates Rodolfo Helg, February 2018 (adapted from Feenstra Taylor) Defining the Exchange Rate Exchange rate (E domestic/foreign ) The price of a unit of foreign currency in terms
Openness in goods and financial markets II. Balance of payments. Uncovered interest rate parity. Goods market equilibrium in the open economy.
Openness in goods and financial markets II Balance of payments. Uncovered interest rate parity. Goods market equilibrium in the open economy. Openness in financial markets: The purchase and sale of foreign
Introduction to Foreign Exchange Slides for International Finance (KOM Chapter 14)
Slides for International Finance (KOM Chapter 14) American University 2011-09-01 Preview Introduction to Exchange Rates Basics exchange rate concepts Exchange rates and the cost of foreign goods The foreign
Exchange rate: the price of one currency in terms of another. We will be using the notation E t = euro
Econ 330: Money and Banking Fall 2014, Handout 8 Chapter 17 : Foreign Exchange Market 1. Foreign Exchange Market Exchange rate: the price of one currency in terms of another. We will be using the notation
Econ 98- Chiu Spring 2005 Final Exam Review: Macroeconomics
Disclaimer: The review may help you prepare for the exam. The review is not comprehensive and the selected topics may not be representative of the exam. In fact, we do not know what will be on the exam.
Lecture 4: Intermediate macroeconomics, autumn 2012
Lecture 4: Intermediate macroeconomics, autumn 2012 Lars Calmfors Literature: Krugman Obstfeld Melitz, Chapters 14 and 15. 1 What have we done so far? Where are we going? Lecture 1: National income, saving
Foreign exchange market based on chapter 14 (Exchange Rates and the Foreign Exchange Market: An Asset Approach) of the textbook
HOMEWORK 6 (ASSET MARKETS) ECO41 FALL 2011 UDAYAN ROY Each correct answer is worth 1 point. The maximum score is 20 points. This homework assignment is due on Wednesday, December 7. Please show your answers
OPEN-ECONOMY MACROECONOMICS: BASIC CONCEPTS
18 OPEN-ECONOMY MACROECONOMICS: BASIC CONCEPTS LEARNING OBJECTIVES: By the end of this chapter, students should understand: how net exports measure the international flow of goods and services. how net
Study Questions (with Answers) Lecture 15 International Macroeconomics
Study Questions (with Answers) Page 1 of 5 Study Questions (with Answers) Lecture 15 International Macroeconomics Part 1: Multiple Choice Select the best answer of those given. 1. If the aggregate supply
Department of Economics Spring 2005 University of California, Berkeley Econ 182. Suggested Solutions to Problem Set I
Department of Economics Spring 2005 University of California, Berkeley Econ 182 Suggested Solutions to Problem Set I 1. This question involves considering how increasing debt burdens may affect the economy.
Agenda. Learning Objectives. Chapter 19. International Business Finance. Learning Objectives Principles Used in This Chapter
Chapter 19 International Business Finance Agenda Learning Objectives Principles Used in This Chapter 1. Foreign Exchange Markets and Currency Exchange Rates 2. Interest Rate and Purchasing-Power Parity
Introduction to Foreign Exchange Slides for International Finance (KOM Chapter 14)
Slides for International Finance (KOM Chapter 14) American University 2011-09-01 Preview Introduction to Exchange Rates Basics exchange rate concepts Exchange rates and the cost of foreign goods The foreign
International Finance
Terminology International Finance Chris Edmond NYU Stern Spring 2008 Trade balance balance on merchandise trade ( goods ) balance on goods and services ( net exports ) Current account balance current account
Study Questions (with Answers) Lecture 15 International Macroeconomics
Study Questions (with Answers) Page 1 of 5 Study Questions (with Answers) Lecture 15 International Macroeconomics Part 1: Multiple Choice Select the best answer of those given. 1. If the aggregate supply
Third Quarter Results (ended December 31, 2016) Brother Industries, Ltd.
Fiscal Year 2016 (ending March 31, 2017) Third Quarter Results (ended December 31, 2016) Brother Industries, Ltd. February 8, 2017 Information on this report, other than historical facts, refers to future
Part I: Multiple Choice (36%) circle the correct answer
Econ 434 Professor Ickes Fall 2009 Midterm Exam II: Answer Sheet Instructions: Read the entire exam over carefully before beginning. The value of each question is given. Allocate your time efficiently
Lesson 14 - Exchange Rates: Money Around the World
Lesson 14 - Exchange Rates: Money Around the World INTRODUCTION Economics Because different countries use different currencies, international trade requires an organized system for exchanging money among
Open-Economy Macroeconomics: Basic Concepts
N. Gregory Mankiw Principles of Macroeconomics Sixth Edition 18 Open-Economy Macroeconomics: Basic Concepts Premium PowerPoint Slides by Ron Cronovich 2012 UPDATE In this chapter, look for the answers
Open Economy Macroeconomics Lecture Notes
Open Economy Macroeconomics Lecture Notes Open Economy Macroeconomics Ozan Hatipoglu Department of Economics, Bogazici University Spring 2014 Ozan Hatipoglu (Department of Economics) Open Economy Macroeconomics
International Finance
International Finance Chapter 21 CHAPTER CHECKLIST 1. Describe a country s balance of payments accounts and explain what determines the amount of international borrowing and lending. 2. Explain how the
Answer Key Testname: HOMEWORK 2
1) A 2) C 3) A 4) B 5) C 6) D 7) C 8) C 9) A 10) D 11) D 12) C 13) C 14) E 15) A 16) C 17) B 18) D 19) D 20) E 21) A 22) D 23) B 24) D 25) D 26) B 27) B 28) A 29) D 30) A 31) A 32) B 33) E 34) C 35) D
Open economy macroeconomics and exchange rates Part I
Understanding the World Economy Master in Economics and Business Open economy macroeconomics and exchange rates Part I Lecture 10 Nicolas Coeurdacier nicolas.coeurdacier@sciencespo.fr Lecture 10 : Open
Université Paris-Nord
Université Paris-Nord Théorie des choix de portefeuilles internationaux Master 1 «Economie et Finance internationales» 2008-2009 Jean-Michel Courtault 1-1 " -C'est pas très bon, hein? -C'est même très
INTERNATIONAL FINANCE MBA 926
INTERNATIONAL FINANCE MBA 926 1. Give a full definition of the market for foreign exchange. Answer: Broadly defined, the foreign exchange (FX) market encompasses the conversion of purchasing power from
Financial markets in the open economy - the interest rate parity. Exchange rates in the short run.
Financial markets in the open economy - the interest rate parity. Exchange rates in the short run. Dr hab. Joanna Siwińska-Gorzelak Foreign Exchange Markets The set of markets where foreign currencies
Real Effective Exchange Rate based on CPI as Price Index for India*
Real Effective Exchange Rate based on CPI as Price Index for India ARTICLE Real Effective Exchange Rate based on CPI as Price Index for India* Effective exchange rates are summary indicators of movements
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Good Luck!
Econ 330 - Final Exam spring2009 Name Student ID Section Number MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Good Luck! 1) Everything else held
Introduction to Futures and Options
Introduction to Futures and Options Pratish Patel Spring 2014 Lecture note on Forwards California Polytechnic University Pratish Patel Spring 2014 Forward Contracts Definition: A forward contract is a
1 The Structure of the Market
The Foreign Exchange Market 1 The Structure of the Market The foreign exchange market is an example of a speculative auction market that trades the money of various countries continuously around the world.
In this Session, you will explore international financial markets. You will also: Learn about the international bond, international equity, and
1 In this Session, you will explore international financial markets. You will also: Learn about the international bond, international equity, and Eurocurrency markets. Understand the primary functions
Week-7. Dr. Ahmed. Domestic Firms International Firms Multinational Firms Global Firms
FINC 5880 Dr. Ahmed Week-7 Name Domestic Firms International Firms Multinational Firms Global Firms Factors that make multinational financial management different Exchange rates and trading International
INTERNATIONAL FINANCE
INTERNATIONAL FINANCE 5. 2017/2018 Ing. Zuzana STRÁPEKOVÁ, PhD. SUA-FEM Nitra CONTENTS: Eexchange rate quotation Cross exchange rates Bilateral arbitration Trilateral arbitration Quotation of forward ER
::Solutions:: Problem Set #2: Due end of class October 2, 2018
Issues in International Finance ::Solutions:: Problem Set #2: Due end of class October 2, 2018 You may discuss this problem set with your classmates, but everything you turn in must be your own work. Questions
4. INTERNATIONAL MONETARY SYSTEMS AND BALANCE OF PAYMENTS
4. INTERNATIONAL MONETARY SYSTEMS AND BALANCE OF PAYMENTS CHAPTER OVERVIEW INTERNATIONAL MONETARY SYSTEM HISTORY PERFORMANCE OF INTERNATIONAL MONETARY SYSTEMS EUROPEAN MONETARY SYSTEMS INTERNATIONAL DEBT
Homework Assignment #2: Answer Sheet
Econ 434 Professor Ickes Fall 2008 Homework Assignment #2: Answer Sheet. Suppose that the price level in the home country is given by P = Pn α Pt α,wherep t is the price of traded goods, and α is the share
Types of Exposure. Forward Market Hedge. Transaction Exposure. Forward Market Hedge. Forward Market Hedge: an Example INTERNATIONAL FINANCE.
Types of Exposure INTERNATIONAL FINANCE Chapter 8 Transaction exposure sensitivity of realized domestic currency values of the firm s contractual cash flows denominated in foreign currencies to unexpected
Open-Economy Macroeconomics: Basic Concepts
Wojciech Gerson (1831-1901) Seventh Edition Principles of Macroeconomics N. Gregory Mankiw CHAPTER 18 Open-Economy Macroeconomics: Basic Concepts Closed vs. Open Economies A closed economy does not interact
Spillovers from Dollar Appreciation
June 6-7, 216 International Monetary Fund Spillovers from Dollar Appreciation Florence Jaumotte (with J. Chow, S.G. Park, and S. Zhang) Motivation Context: appreciation of US Dollar changing growth differentials,
EC 205 Lecture 20 04/05/15
EC 205 Lecture 20 04/05/15 Remaining material till the end of the semester: Finish Chp 14 (1 subsection left) Open economy version of IS-LM (Chp 6.1&6.3+13) Chp 16 OR Dynamic macro models (As time permits)
Those who are interested in international business may wish to take FIN 430 which is our course on international financial management.
1 For the most part, the basic principles you ll learn in this class apply to both domestic and international businesses. However, two important differences you ll find when doing business internationally
Economics. Open-Economy Macroeconomics: Basic Concepts CHAPTER. N. Gregory Mankiw. Principles of. Seventh Edition. Wojciech Gerson ( )
Seventh Edition Principles of Economics N. Gregory Mankiw Wojciech Gerson (1831-1901) CHAPTER 31 Open-Economy Macroeconomics: Basic Concepts In this chapter, look for the answers to these questions How
Homework Assignment #3: Answer Key
Econ 434 Professor Ickes Fall 2006 Homework Assignment #3: Answer Key 1. Productivity growth has increased in Central and Eastern European countries relative to Western European countries. This has implications
8th International Conference on the Chinese Economy CERDI-IDREC, University of Auvergne, France Clermont-Ferrand, October, 2011
1 8th International Conference on the Chinese Economy CERDI-IDREC, University of Auvergne, France Clermont-Ferrand, 20-21 October, 2011 Global Imbalances and Exchange Regimes with a Four-Country Stock-Flow