Exam 7: Foreign Exchange Rate Determination and Forecasting

The more efficient the foreign exchange market is, the more likely it is that exchange rate movements are random walks.

Foreign exchange forecasting can be either long-term, or short-term in duration. Compare and contrast the motivation for and the techniques a forecaster might use for each of the time periods.

Which of the following was not an international currency crisis in the 1990s and early 2000s?

"Overshooting" exchange rate changes in response to an action of the Federal Reserve would be an example of

The Asian currency crisis was primarily a

In 1991 the Argentine peso was fixed to the value of the U.S. dollar on a one-to-one basis.

Argentina's economic performance in the 1990s while their peso was pegged to the U.S. dollar can be characterized as ________ rates of inflation and ________ rates of unemployment.

The Chinese government announces that on December 31, 2006 the value of the Yuan will officially change from 8.287 Yuan/$ to 7.500 Yuan/$. This would be an official ________ of the Chinese currency of ________.

The ________ provides a means to account for international cash flows in a standardized and systematic manner.

The authors compromise as to the key factors for exchange rate determination. They conclude that ________ is important in the short run, but that ________ determines long run exchange rates.

The authors claim that the theories of international currency values hold better for less liquid and poorly capitalized markets.