Business, 30.10.2020 07:40 Crtive6538

Using the following data on spot exchange rate of Poland against the U. S. dollar and the annual interest rates of these two countries, forecast the outright values of 6 and 12 months ahead of the Polish currency. Draw on the forecasting theories or parities that are the subject of Chapter 6 of the book, and the other discussions we have had in this regard (e. g., lecture notes AMP06 and Amp07). Use the more accurate approach. Polish currency is called Zloty (= PLN)
Spot rate PLN 4.17/USD
US commercial interest rate 3.5 percent
Polish commercial interest rate 5.00 percent

Review the following questions.
1. The outright forecast for 6 months is:
2. The outright forecast for 12 months is:
3. The theory that you are using is called:
Purchasing power parity
Interest rate parity
Fisher effect
International fisher effect
None of the answers in this group is correct.

4. This theory holds very well in the:
Short-run
Long-run
Chaotic periods only
None of the answers in this group is correct.

5. Based on this theory, the country that offers a higher rate of interest should expect a fall in the value of its currency.
I agree
I disagree
You really cannot tell
Never heard of such a thing!
None of the answers in this group is correct.

Answers: 1

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Using the following data on spot exchange rate of Poland against the U. S. dollar and the annual int...

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