FINE 482 Study Guide - Final Guide: Reinvestment Risk, Singapore Dollar, Quantitative Easing
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Japan: therefore jpy appreciates, gbp depreciates, japan is going through government reshuffling and political uncertainty. Then investors will be shifting their capital to their united kingdom: therefore jpy depreciates, gbp appreciates, stronger vs weaker currency trade off, a strong currency makes, exports more expensive. Is the simultaneous purchase and sale of a foreign currency: foreign exchange market efficiency, foreign exchange market is very efficient due to. Its 24 hour trading schedule: extensive telecommunication network, shear size of the market, computerized quotation system (which slowly pushes brokers out of trade) Canada: indirect quote a foreign currency price of home currency e. g. $[]/c$ in, the us dollar based quotations. P: assumes free and frictionless trade conditions. If inflation in country a is greater than in country b, currency b should appreciate against currency a; e(a/b) increases. If inflation in country a is lower than in country b, currency b should depreciate against currency a; e(a/b) decreases.
