Learning objectives: Explain the purchasing power parity theorem and use this theorem to calculate the appreciation or depreciation of a foreign currency. Describe the relationship between nominal and real interest rates. Describe how a non-arbitrage assumption in the foreign exchange markets...
On p.7 of Ch.9's notes (Foreign Exchange Markets) under the Learning Objective "Describe the relationship between nominal and real interest rates", I'm not clear which formula we should be using if given a question. What is the relationship between these two equations, and are they used for...
Learning objectives: Describe the framework that led to the introduction of negative policy rates. Explain the implications of the technical implementation of negative policy rates. Identify factors that determine the lower bound for nominal interest rates. Identify and compare the risks...
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