_______ states that differential rates of inflation between two countries tend to be offset over time by an equal but opposite change in the spot exchange rate.
A: The Fisher Effect
B: The International Fisher Effect
C: Absolute Purchasing Power Parity
D: Relative Purchasing Power Parity
A: The Fisher Effect
B: The International Fisher Effect
C: Absolute Purchasing Power Parity
D: Relative Purchasing Power Parity
举一反三
- Which<br/>of these states that the difference in interest rates between two<br/>countries is equal to the percentage difference between the forward<br/>exchange rate and the spot exchange rate?() A: Arbitrage<br/>equilibrium B: Relative<br/>purchasing power parity C: Absolute<br/>purchasing power parity D: Interest<br/>rate parity E: Cross-rate<br/>parity
- _________________ refers to that nominal interest rates (i) in each country equal the required “real” rate of interest (r) and the expected rate of inflation over the period for which the funds are to be lent (l); that is, i = r + l. A: Fisher effect B: Fisher function C: Fisher rule D: Fisher theory
- Which of the following is not true? A: Interest rate parity theory links money markets and FX market. B: PPP theory relates the money market and the FX market. C: Fisher open links securities markets to the spot exchange rate market. D: Fisher effect relates goods markets to the securities market.
- Expected future spot rates are based on relative inflation rates between two countries
- Relative Purchasing Power Parity is relevant because: A: Empirical tests have shown that Absolute PPP is always violated, while Relative PPP is a good predictor of short-term exchange rate exposure. B: Consumption bundles are not always comparable across countries. C: Prices levels are not stationary over time. D: Investors care about the real return on their international portfolio investments. E: Investors care about the nominal return on their international portfolio investments.