International Finance (Exchange Rate) Project

When you submit your project it must consist of: 

· An Executive Summary (5%)

· A brief background essay on each countries’ key exports and imports (comparative advantages), including some focus on direct trade between the two countries (20%)

· A self-constructed time-series graph showing the exchange rate movements (Starting from September 4th)—including callouts indicating when major news items occurred which affected the exchange rate. This should provide prima facie evidence whether or not this forex market is efficient (20%)

· A brief description of which regime is being used (fixed, floating, etc). which forex markets exist (spot, forward, futures, options, etc) in which locations, when they are open, trading volumes, etc. A map can be illustrative! (10%)

· A series of investigative research essays, examining the key theories including:

· PPP (both absolute and relative)

· The Fisher Effect

· IFE

· IRP

· The degree of market efficiency. (30%)

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