This paper conducts tests to provide a clearer picture of the accuracy of estimation of exchange rate modifications.
Written in 2004; 2,615 words; 30 sources; APA; $ 78.95
Paper Summary:
This paper analyzes the rational expectation hypothesis relating to the foreign exchange market modifications using various statistical methods and survey data, including three very important exchange rates: German Mark / U.S. Dollar, G.B. Pound / U.S.Dollar, and Japanese Yen / U.S. Dollar. The author points out that overlapping forecasting causes the serial correlation problem, which is corrected by estimating the forecast errors as a moving average process. The paper concludes that the expectations of spot exchange rates at various horizons and the actual rates have unit roots, all exchange rates showed stationary forecast errors for the one-month and three-month ahead estimations and the GB Pound / US Dollar proved stationary for the six-month ahead estimation, which was consistent with the results of the unit root tests.
Table of Contents
Problem Identification
Objectives
Hypothesis
Methodology
Literature Review
Findings and Results
Conclusions and Recommendations
From the Paper:
"Testing the rational expectation hypothesis in realtion to the estimation of the Mexican Peso in this time frame is biased beyond doubt. Therefore, applying the standard assumption of normality of the distribution, currently used in statistic tests, will not yeald any valid results. This statistical defect may also be observed in other circumstances, such as the probability (even quite small) of a major modification of the exchange rate in the studied period, a speculative bubble or an important change in fundamentals, especially iF the sample size is not sufficient in order to correct such faults (by applying the central limit theorem)."
We have thousands of high-quality term papers, research papers, essays, book reports and dissertations on every topic. At AcaDemon, you can download those term papers to help you write yours! You can be sure that the term paper, essay, book report or research paper you download are top-quality, competitively priced and high-level work.
This Free Term Paper Abstract is a part of our Term Paper Library.Here you can purchase research papers, examples of essays, academic dissertations, articles, notes, analytical papers, book reports, stories and poems. We have thousands of persuasive, point-of-view, narrative, critical, compare and contrast and other types of essays in our Library. You can also find here Term papers on "Determination of Exchange Rates", Essays on "Determination of Exchange Rates", Research papers on "Determination of Exchange Rates", Student papers on "Determination of Exchange Rates", Book reports on "Determination of Exchange Rates", Dissertation on "Determination of Exchange Rates", Thesis on "Determination of Exchange Rates", Summary of paper on "Determination of Exchange Rates", Articles written on "Determination of Exchange Rates".
Look for more research papers, essays and book reports on