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FIN 535 Final Exam 1&2 2017 Last document update:   ago

1. Which of the following theories suggests the percentage change in spot exchange rate of a currency should be equal to the interest rate differential between two countries? a. absolute form of PPP. b. relative form of PPP. c. international Fisher effect (IFE). d. interest rate parity (IRP). 2. If interest rates on the euro are consistently below U.S. interest rates, then for the international Fisher effect (IFE) to hold: a. the value of the euro would often appreciate against the dollar. b. th...