Differentiate between Portfolio Investment theoretically and graphically the effect of movement of capital from one country to and Direct Foreign Investment. Explain another country on home and the host country. Also, define exchange rate and discuss theoretically and graphically how it is determined in market. note make the graphs and its explanation graph and its explanation is necessary

Q: Discuss the key differences between the operation of a currency forward market and a  futures…

A: Foreign exchange, also known as Forex or FX, is the process of converting one currency into another…

Q: Illustrate how to synthesize a forward hedging strategy by using only the money markets, in order to…

A: The idea of forward hedging is to lock-in the price (or exchange rate) today for a future foreign…

Q: Investors who have international investments are subject to I. political risk II. currency risk…

A: The investors invest in various assets or at various sources in order to generate higher returns or…

Q: Define foreign currency hedges.

A: Definition:   Hedge: The process through which the risk associated with a particular project, can be…

Q: Fully discuss the Arbitrage Pricing Model. Show formula and give examples.

A: There are multiple methods that estimate the stock's required return. The capital asset pricing…

Q: Describe about the foreign currency risk.

A: Foreign currency- As we know every country has its own currencies in which it operates. Hence,…

Q: Define spot, forward, and swap transactions in the foreign exchange market and give an example of…

A: The foreign exchange market (also known as the Forex or FX market) is a decentralized global market…

Q: Differentiate between spot and forward exchange rates

A: Introduction: The spot rate is the rate at which the actual deal or sale is to take place…

Q: how did you get the effect of the exchange rate?

A: Statement of cash flows is a part of financial statements which is used by the users of financial…

Q: Critically evaluate the argument that fixed exchange rate regime is better than flexible exchange…

A: Fixed exchange regime refers to that regime in which exchange rate in a country remains fixed…

Q: Give an overview of the main types of orders you can have within a financial market in terms of…

A: A financial market is a marketplace where financial assets such as stocks, bonds, currencies, and…

Q: Demonstrate how interest rate and currency swaps are constructed and discuss the comparative…

A: Two parties can exchange cash flows based on various interest rates or currencies using financial…

Q: explain what economists attribute so much attention to Real Exchange Rates? Provide an answer that…

A: Exchange rates are the rates in which one currency could be exchanged into the currency of another…

Q: According to the efficient market school, do the best job at predicting future spot exchange rates.

A: Efficient market -It is such a market in which prices reflect all available market information.

Q: Explain with examples how to measure exchange rate risk for long positions and short positions Notes…

A: Forex (Forex or FX) is the trading of one currency against another. For example, you can exchange US…

Q: 2. The Is - LM -UIP Model Consider an economy that experiences an increase in consumer confidence.…

A: A fixed-rate, often known as a pegged rate, is one that the government (central bank) establishes…

Q: Describe how taxes and tax adjustment coefficients influence investment rankings?

A: Taxes and tax adjustment coefficients can have a significant impact on investment rankings. Tax…