Question 1

a) Show the relationship between the Unhedged Interest Rate Parity (UIRP). the parity of

purchasing powers (PPP). Fisher's relation, the interest rate parity covered (CIRP) and the by pochese

of the non-bias (UH) by taking a numerical example. Write each of the equations.

b) How is the quality of the forecast assessed? Write the equations.

c) Show the expression (equation) that represents exchange rates as an asset. This equation

uses the fundamentals.

d) Use the batch of iterated anticipations to solve the equation obtained in c).

e) Show how we convert the (UIRP) to real term and use a mean reversion process

(Incan reverting process). Interpret this equation by making an advcnani exchange rate prediction

one centil aux d inferel recl.

D) Is there a link between the random walk, the unbiased assumption (UH) and the use of analytics

technical. Define and explain each of the concepts

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