Financial management 3 – questions
- Explain the purchasing power parity (PPP) theory and its implications for exchange rate changes
- Explain the international Fisher effect (IFE) theory and its implications for exchange rate changes
- Compare the PPP theory, the IFE theory and the theory of interest rate parity (IRP)
- Explain how firms can benefit from forecasting exchange rates
- Describe the common techniques used for forecasting
- Explain how forecasting performance can be evaluated.
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