Written by students who passed Immediately available after payment Read online or as PDF Wrong document? Swap it for free 4.6 TrustPilot
logo-home
Previously searched by you
Previously searched by you
logo
  • Fontys Hogeschool (Fontys)
  • International Economics (IEC)
To add items to your wishlist, you must be logged in
Class notes

International Economics Course 3

Rating
-
Sold
-
Pages
1
Uploaded on
18-10-2018
Written in
2018/2019

Aantekeningen van Internationale Economie gegeven door Tahmasebi aan de Fontys Hogeschool Marketing Management te Eindhoven locatie Rachelsmolen.

Institution
Fontys Hogeschool (Fontys)
Course
International Economics (IEC)

Content preview

International Economics
Course 3 14-9-2018 Jurne Sleddens


How does the forward rate come about?
As you know, forward contracts protect you against negative effects of exchange rates, but how are
they priced?
One theoretical explanation is referred to as the interest rate parity theory or IRP

Purchasing Power Parity (PPP)
PPP theory attempts to explain the determination and changes in the spot exchange rate. Its
assumption is that there is the law of one price.
The law of one price: Expressed in the same currency, goods should cost the same anywhere. If the
law is violated, the exchange rates will change to make the law hold again.

Case
1 basket = 250 USD in USA. 1 basket = 500 CAD in Canada. USD/CAD= 2.
This means law of one price holds.

1 basket = 250 USD in USA. 1 basket = 500 CAD in Canada. USD/CAD= 3.
Law of one price doesn’t hold. Arbitrage affects exchange rates.
Exchange rate will change to make the law hold again which means it changes to USD/CAD=2.
Report Copyright Violation

Written for

Institution
Fontys Hogeschool (Fontys)
Study
Commerciële Economie
Course
International Economics (IEC)

Document information

Uploaded on
October 18, 2018
Number of pages
1
Written in
2018/2019
Type
Class notes
Professor(s)
Tahmasebi
Contains
3

Subjects

  • tahmasebi
  • iec
  • international economics
  • internationale economie
  • international economy
$5.28
Get access to the full document:
Wrong document? Swap it for free Within 14 days of purchase and before downloading, you can choose a different document. You can simply spend the amount again.
Written by students who passed
Immediately available after payment
Read online or as PDF
Get to know the seller
Seller avatar
Reputation scores are based on the amount of documents a seller has sold for a fee and the reviews they have received for those documents. There are three levels: Bronze, Silver and Gold. The better the reputation, the more your can rely on the quality of the sellers work.
jurnesleddens
3.2
(5)

Also available in package deal

Thumbnail
Package deal
International Economics 2018/2019 All Lectures @Fontys
-
2 7 2018
$ 8.91 More info

Get to know the seller

Seller avatar
Reputation scores are based on the amount of documents a seller has sold for a fee and the reviews they have received for those documents. There are three levels: Bronze, Silver and Gold. The better the reputation, the more your can rely on the quality of the sellers work.
jurnesleddens Fontys Hogeschool
View profile
Follow You need to be logged in order to follow users or courses
Sold
44
Member since
9 year
Number of followers
36
Documents
48
Last sold
2 year ago

Als je een vraag/opmerking hebt dan kun je contact met me opnemen via Facebook :)

3.2

5 reviews

5
1
4
2
3
0
2
1
1
1

Why students choose Stuvia

Created by fellow students, verified by reviews

Quality you can trust: written by students who passed their tests and reviewed by others who've used these notes.

Didn't get what you expected? Choose another document

No worries! You can instantly pick a different document that better fits what you're looking for.

Pay as you like, start learning right away

No subscription, no commitments. Pay the way you're used to via credit card and download your PDF document instantly.

Student with book image

“Bought, downloaded, and aced it. It really can be that simple.”

Alisha Student

Working on your references?

Create accurate citations in APA, MLA and Harvard with our free citation generator.

Learn more Create citation
Working on your references?

Frequently asked questions