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chapter v forecasting exchange rates i.
chapter v forecasting exchange rates i.

... The MYR is predicted to depreciate 1.52% against the USD next month. The spot rate this month is St=3.1021 MYR/USD, then, for next month, we predict: SFt+1 = 3.1021 MYR/USD (1.0152) = 3.1493 MYR/USD. Based on these results, the Malaysian firm, which imports goods from the U.S., decides to hedge its ...
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... legislature required the Department of Finance to use dynamic estimation techniques to analyze "probable behavioral responses of tax payers, businesses and other citizens" to large tax change proposals. This report is a review of the use of Computable General Equilibrium (CGE) models to make dynamic ...
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... in textual form. Written reports are useful in providing background information, but may often be too general and give little guidance to the numerical evaluation. The second source of information is analysis of prices of assets traded in financial markets. The procedure is as follows: A valuation m ...
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risk appetite renaissance - RBC Global Asset Management

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... specific to the functioning of sophisticated financial markets. Chief among these “systemic” factors were the full-fledged deregulation of financial markets and the increased sophistication of speculation techniques and financial engineering. Other determinants were also at play, particularly the sy ...
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Financial economics

Financial economics is the branch of economics characterized by a ""concentration on monetary activities"", in which ""money of one type or another is likely to appear on both sides of a trade"". Its concern is thus the interrelation of financial variables, such as prices, interest rates and shares, as opposed to those concerning the real economy. It has two main areas of focus: asset pricing (or ""investment theory"") and corporate finance; the first being the perspective of providers of capital and the second of users of capital.The subject is concerned with ""the allocation and deployment of economic resources, both spatially and across time, in an uncertain environment"". It therefore centers on decision making under uncertainty in the context of the financial markets, and the resultant economic and financial models and principles, and is concerned with deriving testable or policy implications from acceptable assumptions. It is built on the foundations of microeconomics and decision theory.Financial econometrics is the branch of financial economics that uses econometric techniques to parameterise these relationships. Mathematical finance is related in that it will derive and extend the mathematical or numerical models suggested by financial economics. Note though that the emphasis there is mathematical consistency, as opposed to compatibility with economic theory.Financial economics is usually taught at the postgraduate level; see Master of Financial Economics. Recently, specialist undergraduate degrees are offered in the discipline.Note that this article provides an overview and survey of the field: for derivations and more technical discussion, see the specific articles linked.
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