Question: Write brief concise responses. All of your response must be correct in order to receive credit. If any part of your response is incorrect, then
1. What has been the influence of globalization on financial markets? Also, explain the influence of globalization on foreign exchange markets.
2. What is the importance of interest rate parity and its influence? Under what conditions might it not hold?
3. Explain the similarities and differences between risk management, hedging, and speculation.
4. Bekaert & Hodrick argues that currency risk can be misleading in what type of system and why?
5. What are the 4 basic types of swaps?
6. What is the cost of globalization?
7. With all the growth taking place in the world could it have a current account deficit? Why or why not? Please justify your answer.
8. Do economists support government intervention in the supply/demand of currency would be supportive exchange rate market stability? Why or why not?
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Question 1 Globalization has had several impacts on financial markets To begin with globalization has lead to increase in accessibility of financial instruments such as government treasury bills Eurob... View full answer
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