Question 1 uip you are in discussion with a forex tradera, Ask an Expert

Economics

Question: 1. (UIP) You are in discussion with a forex trader.

a. She reveals that she made a 10% annual rate of return last year. Based on these data, can we say that the forex market in question violates the efficient markets hypothesis (EMH)?

b. The trader reveals that she can make predictable 10% annual rates of return on forex trades for a pair of currencies, with a standard deviation of 25%, and has been doing so for a long time. Calculate the Sharpe ratio for these trades. Based on these data, does the forex market in question satisfy EMH?

c. Can the trader's predictable profits be explained by trading frictions? By risk aversion?

2. (Default) "Poor countries are exploited when they borrow in global capital markets, because they are charged an extortionate rate of interest." Explain how empirical evidence and theoretical arguments might counter this assertion.

View complete question

Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M92288867

Have any Question?Write your Review or question?

Related Questions in Macroeconomics

Please answer the following four discussion questions1

Please Answer The Following Four Discussion Questions 1. Explain four types of unemployment 2. Explain the advantages and disadvantages of: (a) A flexible exchange rate regime (b) A fixed exchange rate regime 3. Suppose ...

Question good x is produced in a perfectly competitive

Question: Good X is produced in a perfectly competitive market using a single input, Y, which is itself also supplied by a perfectly competitive industry. If the government imposes a price ceiling on Y, what happens to t ...

Question 1 consider the following market for a public good

Question: 1) Consider the following market for a public good. Jules and Zooey each have a demand curve for the good given by P = 8 - 2Q. This public good can be supplied at a constant price MC=$8 (a) If Jules and Zooey a ...

Question - consider a market with 100 consumers each

Question - Consider a market with 100 consumers. Each consumer would like to buy at most one unit and is willing to pay up to 10$. There is an incumbent firm that already operates in the market and a potential entrant fi ...

Question firm 1 must decide whether to enter an industry in

Question: Firm 1 must decide whether to enter an industry in which firm 2 is an incumbent. To enter this industry, firm 1 must choose to build either a plant with a small output capacity (S), or large output capacity (L) ...

Principles of macroeconomics assessment - supply and demand

PRINCIPLES OF MACROECONOMICS ASSESSMENT - Supply and Demand, and Equilibrium Analysis Assume: Demand Curve: Q D = 80 - 10P; and Supply Curve: Q S = 10P 1. Using the above information, complete the schedules for Quantity ...

Question assume two countries a and b with sizes of

Question: Assume two countries, A and B, with sizes of domestic markets 300 million and 533 1 3 million units in annual sales, respectively. In this market, firms compete by differentiating their product, while the cost ...

Question assume a nissan dealer in the us bought 30 maximas

Question: Assume a Nissan dealer in the U.S. bought 30 Maximas directly from Japan at a cost of $20,000 per car in the fall of 2002. By December 31, 2002, the dealer had sold 10 of these cars for $27,000 each. The remain ...

Question the competitive nature of the market influences

Question: The Competitive nature of the market influences labor markets outcomes. Explain and show graphically why a firm with monopoly power hires less labor than a firm hiring labor is a competitive market. Explain and ...

Question - a small island nation is endowed with

Question - A small island nation is endowed with indestructible coconut trees. These trees live forever and no new trees can be planted. Every year $1 million worth of coconuts fall off the trees and can be eaten locally ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Macroeconomics Expert