Description of the Assignment:
The assignment consists of two Tasks. Task 1 will check your understanding of the forex market and a central bank monetary policy under flexible exchange rates. Task 2 will test your ability to apply the knowledge on interest parity condition to actual behaviour of international financial markets.
To answer questions in this Assignment, I suggest studying chapters: 12, 13, 14, 15 from International Economics by S. Husted and M. Melvin as well as lecture presentations on the same topics.
Assessment policy:
The assignment is worth 30 points.
The following aspects of the assignment will be assessed:
- Correctness and unambiguity of answer
- Thoroughness of explanation
- Completeness of workouts
- Clarity in diagrams’ drawings
Note: This is an individual not a group work!
Editing requirements:
The work should be written in MS Word, Times New Roman, font size 11, 1.5 spacing, normal margins. The only exceptions are for diagrams that can be drawn in MS Word or by hand