Business, 10.11.2020 05:00 bookS4169

Using the following data on spot exchange rate of Poland against the U. S. dollar and the annual inflation rates of these two countries, forecast the outright values of 6 and 12 months ahead of
the Polish currency. Draw on the forecasting theories or parities that are the subject of Chapter 6
of the book, and the other discussions we have had in this regard (e. g., lecture notes AMP06 and
Amp07). Use the more accurate approach.
Polish currency is called Zloty (= PLN)
Spot rate PLN 4.26/USD
US inflation rate 2.2 percent
Polish inflation rate 4.4 percent
Review the following questions. When you are ready, enter your responses on Canvas (in the tab
Quizzes, WA03). Thank you.
1. The outright forecast for 6 months is:
2. The outright forecast for 12 months is:
3. The theory that you are using is called:
Purchasing power parity
Interest rate parity
Fisher effect
International fisher effect
None of the answers in this group apply to my work.
4. This theory holds very well in the:
Short-run
Long-run
Chaotic periods only
None of the answers in this group are correct.
5. Based on this theory, the country that has a higher rate of inflation should expect a rise in
the value of its currency.
I agree
I disagree
You really cannot tell
Never heard of such a thing!
None of the answers in this group are correct.

Answers: 3

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Using the following data on spot exchange rate of Poland against the U. S. dollar and the annual in...