Purchasing Power Parity

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Post on 20-Jun-2015



Economy & Finance

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<ul><li> 1. Purchasing Power Parity<br /></li></ul> <p> 2. Before we discuss PPP theory let us dig out <br />something from our previous knowledge<br /></p> <ul><li>Exchange Rate </li></ul> <p> 3. Spot Rate 4. Forward Rate 5. Direct and Indirect Quote<br /></p> <ul><li>Arbitrage </li></ul> <p> 6. Purchasing Power 7. Inflation 8. Perfect or Efficient markets<br /> 9. We will try to find the answers for the following?<br /></p> <ul><li>Can we predict the changes in exchange rate? </li></ul> <p> 10. Does inflation affect exchange rate? 11. If it does, how? 12. Does interest rate affect exchange rate? 13. If it does, how? 14. How can we arrive at a more proper and actual exchange rate?</p>


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