MIlE 24711n1em111011rM11iMnta 731101 MIcIm P9 2 of 12

AI flO pokdI) VVhIch modeII that you have studied from Exchange rate atltermlnaUOn- Indlcae that cumtney 1gthInI when Its IntereIt rete Increases WhIch modaIa Indicate the oppoalte How do you explain the dIKrepency

Hint

A taamlh free of Excban~ Rate Models-

ModaIA--

I

I 1 JIftfkt ~ ndllilly

-+- IIIIC pMI)

cJurJ JOl- o(A1 mottLY tAtutaJtJ

AM SUO~HNr (CtAu-s TAtltjot

clo 1WI6 ( (AA IHA1 rl ef NotJ ~tts

T~ f~)(alt-I~IA t-noJtl asstutu tNtf dDmuh( ~oofyw tV-t ~Ur

jlt)(ihl1 ppp holtLs uti~Damp($7 tVU QAt ftt~t NIl flLWAI1 ~ sWnc

- It hAs tNohL+1CA( Vet~ hv~ is iltoflJStv1- wfA ftbfUi

I -+- p-J- J

--------------------------------~I I

Acta

ity

MoaIc8dIl Model

Sdcty ooaaodlampy -PUI~

[AnWI[ to QuUon 1 20 points)

bull M oU~l1 Mo Jt(

S - pHfgtrIc~rc~ - p tvtltL (yl~ tf)

tvhtn ~ c1t~(f ~Me) fu-tAsu -

eUgtmfJhC pnu iD~ tcJttJts

IlDpm~t capita subIlIlWllllity ~ Risk pmnim nonlJlO --- Foonrd IIIIe blued predictor

Small Counuy Model ~~ J~ ~

PmemdLoQl Habilat Model I

11

2) MIlE 2471nI8rnIJIIIcNI1rMDnentI 7131 MIcIMn Pegi 301 12

(AntMr to Q_1Ion 1 20 poInttJ

bull O~VsOOfij Mokl

-As lnHSt ~t-e swdcly MStS CAJlI1 AI- wt mrtAtJA1t APflt)tAt

AM CAfiflll witA fl 1tD ~Jc IrAI-kt t

- 01lf-oHrnA 1 CN+~ tlu Uf~Dt1 t~T (~t$h~ +u tANfCJ1 wK

~~lfr Jtpt-t+t fV+H ttAAr~ IA ~f~~t~~

- Tkt Sh1- PMtl lD~l tJo~ H) ASJ(Vlts fl-tjullAt1-t1t r~ShkA_U Ms lIu~ul cl~su 1-0 1fA(7 by Igt-HL(ft +lv-t 90~ prJ u~ ~IA-j MN ~oJ7

~ tl6Stt pHUA

bull POMi-UO - Bamplll~u ApPfDA~ (fAU Mobls )

- As tlo n(lt)-h ( i ItQlU- rlaquot- 4 ~ NMA6 eA ~~-rt c ~ eN ~ U S~tN

- TJv pOt-tp II 0 -I~ 70 dds ~5poundVL ~Mftl-~ smiddot IA)J~tl4f7btY Dj

donMth ~fr~11l ~1 selMu ~ltNo-l hi~httj1 Su tVte oj t-JtAttmiddot

bull Sum trVAJ-r - Wh~1 ~ftJut Mtl --NAb eJI ((~~ (-v ~ U

fl rARtNcAp-fl (fv(OI(tvTst NtJ~ r )

h jiJt lAfUlaquo1e AM +he JMdJAtgtIr ~ruJl(t (OlltrJAoD lt-tkl)

C ~p cl At l (P-rjo U0 - BAltVtu AfO Q cJ gt ~ REA T - T~ t ~ 0(ir- atH-u-ut 0 fIhc~ S Dj (AM-N J I~Lcu cJ~kJ oS JettI44J(

Ot tJJOIlt~ AJlUJtrf1~ oj tkc raquoUI~J sfec~uA ~JD lie

M8ampE 247alnlemllonllllrMlllrnerD 7131108 MIdIenn Page 4 GI 12

a-lioo 2 20 DOIolI) (I) Determkle the hedged retum of one-year Australian bond Inves1ment with the following deta

So =08271 F bull I bull 08024 Australian bond yield =559 US borrowing ratemiddot 244

(II) Create the synthetic forwero for Australian Dollar Compare it wtIh the outright Aultralan CoIar forwaro Fol bull Do you have MY creative ute of this price discrepancy

(III) Note thet Ausltalan DoIer has been BigMac Indices friendly In Ile past Support or argue your approach in (I) with the following BigMac Indices a8 of May 2009 00 you really need to hedge your investment Whet other information are needed to answer the hedge-or-not-to-hedge question

I The hilRburterlbndani IIIMKprIaI

ActNl uJ)-Co) It 11IflIttImiddot ~ Y bull-lMt ftIaR runJnll cleUM1RfIlJ

Ualhd Sampilnt n~ )~

~lI SO ))() )2~ )4 -1 AI9fIIllN AU~ 1 l9 0~1 1 ~1 middot)8

il RNIa_Ol )4 Ul 232 middot2 019 ))0 Igt 14t middot1

AimM41

(~ (I~ ))6 1 18 114 ~

(NIP SSO 2~1 4lt middot19

(JIiAI Yun ll ~ U) )~) 684 middot48

tlw ~ ron94 1W IU 219 -I)

~Io Olen) SOl In ~ 11 4J

(~ Pvund 1)0 2 14 ) 61 ~SI -)4

[uOf 042 4 )8 locmiddotmiddot 1211 24

Mongbg HlIll ) 112 116 71S -~l

~ fotlnl lO 292 l1l B middot18

~ 1Iupl 19100 1n 11310 -Sl~l hM( ~fI4o 10 169 4ZIo 401

JoM Vl90 U) III 1908 middot9

M~ RIINJt O 12 ISS ) 61 o

Mea(0 ))0 llO 912 144 -1S

llewllWnd 1CH90 241 1)8 UI middotJO 11_400 U 91 111)

Pm Sol06 2gt4 118 lI middot18

ft6~ ~~O UJI 111 414 -42

PoIHd 2lGty 100 101 I )48 -4J

~lO 11l I1S )~I middot~I -x11~sut PJvall00 1 211

In9S UI 111 I ~I middot26

SooIUI AIriu US 1 41 101 - ~J

SouUI ))00 9)2 l lIO middot11

~ SelJao 4sa 10 1110 19

~ (Nf~ SAO 114 I sa )1

~

lull IImu loll n 2 n 111 US iso middot50

14S U4 til 1 l1l Yo tltd tl In UnlI4 Uft Ifbull (Nut9 sn h~ 100amp_~ 1119~ -~ f1(ft bullbull1C4 bullbullou __ ~_Mlt00~ (_

l~~

MSampE 247 fnIamaeIon InvaebMnt 2-D 7131Jlraquo fJcIenn ~ ampof 12

(AnI to Avgllon 2 2Q pqln1l1

(~ ) F I+i 5 OBl -- A$ (~) - J a- tI CI + lmiddot1J1)---- (I 0s - + 10$ f D1

~ rJI~4 f ~AS rry~4y gt S J1 i ( Acu~lAA AM y(tI)

(i ) FOil S ( r-+ i- i) = _0 B)7 I ( 1+ )4+ 1-) S ( I+- lAi j ( J + r S9 1 ) -= o 30 l4-lA$

FDI = O8D~4- gt FI OcJD~4

10 +-k( ~Vtlf~e Dj -Hu tU-b ffjl tl -ho1 J tV~ CM

bull BOH-OI-J ~St11lt1 tl~ ((ev A $ I ODO ODO AXr r 11 At- leoJ I W~ hod Pt( blc1c A$ ors9o o

bull SlAy (( S 1gt at sPDt NAtr )0 $ 08gt-71A$

WI ~t1 ct 8l7 100

bull ltJts+ us 1- Qt lQ( I (N(l tt- f 84-7 )81 ~4

bull S(lU US 4 f()w~ ~t $ O8o)fAJ wo hAv~$( oSI ~4

A1gt I orr 1-3 4-- - A$ I oSS 10D $ ~ 1- (fHiN 6j AJ-J~~)

(iii) 1 wecJol ~C4t App~ck ttt~ ~ (i ) TIv AJf-L~~ dDH- $

tjltatlr ~~ w s v_lr To CAt1t tJcJ~t us ~IVu

~I t~ ~ MU It f~~ tamp S~Jut ~1 wt ~ Il()t ~ 1D

~l Sctf Wt ~s ~ ot~ ~IIJJampf~ tVVfft tL ~ _~~ ft -~ ~~ Dh sampUA ~ ~ ~s oj All ~il

GtgtP IOW~ tAjllttgt ~Vflt N4fl JoJPf)j1J- ~I ~ t(101

A-usir~( 0 -h~ ~f b~yen SlA rllA ~ de++j

-----

t

MSampE WalntemelollBllrMtIIIMI1II 7131100 ttcbnn hge8 d 12 -z-o QMtdon J 120 pgI PIeIIe provide three lea of thumb from your keen observation of the above BJgMac IncIcM as of May 08 200Sa How wll you apply your finding to international Investments Be specUlc

rAnIWIt to QuftVoD 3 20 points]

bull f-Aost DtV~~ltlel CMHVt UW AL p~ 1- so m-~ t~ft

~1Mw ~CIlcA ltV btn)c N CAJAY w ituiIANlC ~ fw~

ThLy RlIjI~l ty nJt IA] p bull siHIII Sgt ~c JrJ~x v~~

n KS olIw- ~

e MAG ~~J( j bA4oJ ~ p-~11 wt- ~ L+

aamps ~ ~t tgt-1- P P P ceAAh t CAt-Nj s~ fA bt ~ It h

J I D~ 111-W H cf4 ctH kJOl rl( (~ h-l~ II ~ S~ 0 Wt tcAoltf ~

bull ~ OJt kvl2tsrj UHUltrl4 Ccu-rWh4 fiN vvltrvvtJ SUo i +~

Bi ~ fvOlt ~J lC tALrlAM ~ (r hi lA ad -fp ~Llaquo A IU ~r

( shy

lb ~

--xJ MSampE 2418 Internationaf Investments 713109 Mkftenn Page 7 of 12

Question 4 (20 points)

Please indicate the reverting forces act upon point B on the following diagram if you find the current financial variables being at point B and away from the parity line

~

Capitoll Oulf1o~5 f ~ 003 S I(t MlreigJ CUrTIlC) I ~ f~~ 0

~ 002 -r--

f c

1 ~

rugtt i 0

a -001 frmiddot ~ If 0

bull lt bull II 02 I~ ( ~lt~ L

-003 shy

~

_

NO

+

-O04 ~lt middotf11il1iiJiCSijJ1~~LLlIPliL~I middotI I ~~a()l -013 middotr itpoundIj~~d I I -002 _OOl iUZlS JUOO OoJ 001 003 o(~

4~ - I fnnp yo + i r )

[Answer to Question 4 20 points]

j (vi f 5 J j - (foret1ftt uw ~~~A~ _- -__-- - ~ rftNlr~ s -

~+ (tamph (v) ~~ IUd t VI- fjvtAt4 l~(71) ~L dh f~ s

~ tJt J1m ~ w2 ttrd i p t JJ1lfr ~~ fIIJ

11 ~ IhvtilllrJ ciAttetl ftwsJIJ1IJ1 r ~ fk JHNIIk oJ ~ ~ fk rtillt ~ I~n us ~f6 IIk

-~ _ ~IA imu ~y hro~~ 1t-7GIVA ~ ~

firt)r ~Of 5 rNcrfAgtU V -WI try l5i Itzjjnfy ($ hi5 k

- Y~ flortA UlrrillltAf 41 r i~~

- 51 i - i~ ff t 1IWyt t - Jf GReAT ~t

~t ~ (rt 1ljo(II

l~~

MSampE 247 fnIamaeIon InvaebMnt 2-D 7131Jlraquo fJcIenn ~ ampof 12

(AnI to Avgllon 2 2Q pqln1l1

(~ ) F I+i 5 OBl -- A$ (~) - J a- tI CI + lmiddot1J1)---- (I 0s - + 10$ f D1

~ rJI~4 f ~AS rry~4y gt S J1 i ( Acu~lAA AM y(tI)

(i ) FOil S ( r-+ i- i) = _0 B)7 I ( 1+ )4+ 1-) S ( I+- lAi j ( J + r S9 1 ) -= o 30 l4-lA$

FDI = O8D~4- gt FI OcJD~4

10 +-k( ~Vtlf~e Dj -Hu tU-b ffjl tl -ho1 J tV~ CM

bull BOH-OI-J ~St11lt1 tl~ ((ev A $ I ODO ODO AXr r 11 At- leoJ I W~ hod Pt( blc1c A$ ors9o o

bull SlAy (( S 1gt at sPDt NAtr )0 $ 08gt-71A$

WI ~t1 ct 8l7 100

bull ltJts+ us 1- Qt lQ( I (N(l tt- f 84-7 )81 ~4

bull S(lU US 4 f()w~ ~t $ O8o)fAJ wo hAv~$( oSI ~4

A1gt I orr 1-3 4-- - A$ I oSS 10D $ ~ 1- (fHiN 6j AJ-J~~)

(iii) 1 wecJol ~C4t App~ck ttt~ ~ (i ) TIv AJf-L~~ dDH- $

tjltatlr ~~ w s v_lr To CAt1t tJcJ~t us ~IVu

~I t~ ~ MU It f~~ tamp S~Jut ~1 wt ~ Il()t ~ 1D

~l Sctf Wt ~s ~ ot~ ~IIJJampf~ tVVfft tL ~ _~~ ft -~ ~~ Dh sampUA ~ ~ ~s oj All ~il

GtgtP IOW~ tAjllttgt ~Vflt N4fl JoJPf)j1J- ~I ~ t(101

A-usir~( 0 -h~ ~f b~yen SlA rllA ~ de++j

-----

t

MSampE WalntemelollBllrMtIIIMI1II 7131100 ttcbnn hge8 d 12 -z-o QMtdon J 120 pgI PIeIIe provide three lea of thumb from your keen observation of the above BJgMac IncIcM as of May 08 200Sa How wll you apply your finding to international Investments Be specUlc

rAnIWIt to QuftVoD 3 20 points]

bull f-Aost DtV~~ltlel CMHVt UW AL p~ 1- so m-~ t~ft

~1Mw ~CIlcA ltV btn)c N CAJAY w ituiIANlC ~ fw~

ThLy RlIjI~l ty nJt IA] p bull siHIII Sgt ~c JrJ~x v~~

n KS olIw- ~

e MAG ~~J( j bA4oJ ~ p-~11 wt- ~ L+

aamps ~ ~t tgt-1- P P P ceAAh t CAt-Nj s~ fA bt ~ It h

J I D~ 111-W H cf4 ctH kJOl rl( (~ h-l~ II ~ S~ 0 Wt tcAoltf ~

bull ~ OJt kvl2tsrj UHUltrl4 Ccu-rWh4 fiN vvltrvvtJ SUo i +~

Bi ~ fvOlt ~J lC tALrlAM ~ (r hi lA ad -fp ~Llaquo A IU ~r

( shy

lb ~

--xJ MSampE 2418 Internationaf Investments 713109 Mkftenn Page 7 of 12

Question 4 (20 points)

Please indicate the reverting forces act upon point B on the following diagram if you find the current financial variables being at point B and away from the parity line

~

Capitoll Oulf1o~5 f ~ 003 S I(t MlreigJ CUrTIlC) I ~ f~~ 0

~ 002 -r--

f c

1 ~

rugtt i 0

a -001 frmiddot ~ If 0

bull lt bull II 02 I~ ( ~lt~ L

-003 shy

~

_

NO

+

-O04 ~lt middotf11il1iiJiCSijJ1~~LLlIPliL~I middotI I ~~a()l -013 middotr itpoundIj~~d I I -002 _OOl iUZlS JUOO OoJ 001 003 o(~

4~ - I fnnp yo + i r )

[Answer to Question 4 20 points]

j (vi f 5 J j - (foret1ftt uw ~~~A~ _- -__-- - ~ rftNlr~ s -

~+ (tamph (v) ~~ IUd t VI- fjvtAt4 l~(71) ~L dh f~ s

~ tJt J1m ~ w2 ttrd i p t JJ1lfr ~~ fIIJ

11 ~ IhvtilllrJ ciAttetl ftwsJIJ1IJ1 r ~ fk JHNIIk oJ ~ ~ fk rtillt ~ I~n us ~f6 IIk

-~ _ ~IA imu ~y hro~~ 1t-7GIVA ~ ~

firt)r ~Of 5 rNcrfAgtU V -WI try l5i Itzjjnfy ($ hi5 k

- Y~ flortA UlrrillltAf 41 r i~~

- 51 i - i~ ff t 1IWyt t - Jf GReAT ~t

~t ~ (rt 1ljo(II

-----

t

MSampE WalntemelollBllrMtIIIMI1II 7131100 ttcbnn hge8 d 12 -z-o QMtdon J 120 pgI PIeIIe provide three lea of thumb from your keen observation of the above BJgMac IncIcM as of May 08 200Sa How wll you apply your finding to international Investments Be specUlc

rAnIWIt to QuftVoD 3 20 points]

bull f-Aost DtV~~ltlel CMHVt UW AL p~ 1- so m-~ t~ft

~1Mw ~CIlcA ltV btn)c N CAJAY w ituiIANlC ~ fw~

ThLy RlIjI~l ty nJt IA] p bull siHIII Sgt ~c JrJ~x v~~

n KS olIw- ~

e MAG ~~J( j bA4oJ ~ p-~11 wt- ~ L+

aamps ~ ~t tgt-1- P P P ceAAh t CAt-Nj s~ fA bt ~ It h

J I D~ 111-W H cf4 ctH kJOl rl( (~ h-l~ II ~ S~ 0 Wt tcAoltf ~

bull ~ OJt kvl2tsrj UHUltrl4 Ccu-rWh4 fiN vvltrvvtJ SUo i +~

Bi ~ fvOlt ~J lC tALrlAM ~ (r hi lA ad -fp ~Llaquo A IU ~r

( shy

lb ~

--xJ MSampE 2418 Internationaf Investments 713109 Mkftenn Page 7 of 12

Question 4 (20 points)

Please indicate the reverting forces act upon point B on the following diagram if you find the current financial variables being at point B and away from the parity line

~

Capitoll Oulf1o~5 f ~ 003 S I(t MlreigJ CUrTIlC) I ~ f~~ 0

~ 002 -r--

f c

1 ~

rugtt i 0

a -001 frmiddot ~ If 0

bull lt bull II 02 I~ ( ~lt~ L

-003 shy

~

_

NO

+

-O04 ~lt middotf11il1iiJiCSijJ1~~LLlIPliL~I middotI I ~~a()l -013 middotr itpoundIj~~d I I -002 _OOl iUZlS JUOO OoJ 001 003 o(~

4~ - I fnnp yo + i r )

[Answer to Question 4 20 points]

j (vi f 5 J j - (foret1ftt uw ~~~A~ _- -__-- - ~ rftNlr~ s -

~+ (tamph (v) ~~ IUd t VI- fjvtAt4 l~(71) ~L dh f~ s

~ tJt J1m ~ w2 ttrd i p t JJ1lfr ~~ fIIJ

11 ~ IhvtilllrJ ciAttetl ftwsJIJ1IJ1 r ~ fk JHNIIk oJ ~ ~ fk rtillt ~ I~n us ~f6 IIk

-~ _ ~IA imu ~y hro~~ 1t-7GIVA ~ ~

firt)r ~Of 5 rNcrfAgtU V -WI try l5i Itzjjnfy ($ hi5 k

- Y~ flortA UlrrillltAf 41 r i~~

- 51 i - i~ ff t 1IWyt t - Jf GReAT ~t

~t ~ (rt 1ljo(II

--xJ MSampE 2418 Internationaf Investments 713109 Mkftenn Page 7 of 12

Question 4 (20 points)

Please indicate the reverting forces act upon point B on the following diagram if you find the current financial variables being at point B and away from the parity line

~

Capitoll Oulf1o~5 f ~ 003 S I(t MlreigJ CUrTIlC) I ~ f~~ 0

~ 002 -r--

f c

1 ~

rugtt i 0

a -001 frmiddot ~ If 0

bull lt bull II 02 I~ ( ~lt~ L

-003 shy

~

_

NO

+

-O04 ~lt middotf11il1iiJiCSijJ1~~LLlIPliL~I middotI I ~~a()l -013 middotr itpoundIj~~d I I -002 _OOl iUZlS JUOO OoJ 001 003 o(~

4~ - I fnnp yo + i r )

[Answer to Question 4 20 points]

j (vi f 5 J j - (foret1ftt uw ~~~A~ _- -__-- - ~ rftNlr~ s -

~+ (tamph (v) ~~ IUd t VI- fjvtAt4 l~(71) ~L dh f~ s

~ tJt J1m ~ w2 ttrd i p t JJ1lfr ~~ fIIJ

11 ~ IhvtilllrJ ciAttetl ftwsJIJ1IJ1 r ~ fk JHNIIk oJ ~ ~ fk rtillt ~ I~n us ~f6 IIk

-~ _ ~IA imu ~y hro~~ 1t-7GIVA ~ ~

firt)r ~Of 5 rNcrfAgtU V -WI try l5i Itzjjnfy ($ hi5 k

- Y~ flortA UlrrillltAf 41 r i~~

- 51 i - i~ ff t 1IWyt t - Jf GReAT ~t

~t ~ (rt 1ljo(II

middot

2-0MIlE 2471 InternIIUorWIlnveanania 7131108 MIdterm Page a0112

QlfIIIon I (20 ppIntI)

P naIyze with ttw Itock and flow modal the Impact on US currency from the bullbullumed greet aucceI of Apple new tablet known bullbull toucb-acreen 10middot ultimate nelbook end Phone hybrtd wIh wi be available before thle Chrlltmal In Europe Plto how the trajectofy of exchange rate S I

S

S-traquo~k

D

T ~ampANt-iry Dj $ pv -11 t tlj ti Mt

o -gt1shy(lutut oj I ttt (l IncrAt T~l

T d ~oj f)( c~ ItAIf (C)(~ 4ft Ruprut ~ Ptt~t ~I (j$ t 1-M I=I0CA lgtt ~ t- us ~oods)

- ------ shy-

_ _---- - ~~- _---_- _- - gtshy r me

W ktf tlAHptAh toNwmtM blAy Ar1( MlAs Aflt rroJNc(t1 ~

tJru ~WANffo Us ~ 61iJ by E AOf t t X fAN1U Tkt rJef1AJIJ CA4ff e

rAe i lvflow Mo~1 mfS +t d I-uuj Ih h1~L tis

e)C~f MfQ I tJu Hc~ ht1kl stOCK ~ufPltr cJu~ ~JtJ rwt-tt f-i) SS flu ~)(C~( Mit ~LS 9~1 tv cl- r-u

f(OW~~~T flu SI-ock ~l 15 cRAf1lJ lItt oC( -Hf-f$

T- StD~ s lila 105 prl ~ tP k 1A Sh~1 t-LN1l e ~NvJQ r-+A S I

~~ ~tfS ar-t NL~IV~ ~ cU ck lr 11 Ju oS ko iKtt SVtAIMAl tr ~f--h Wo41J ~ bull j - l~ t( -i ~1JJ1t4rtt

I[Anbullbull to AulIon O 2Q poln)

s shy tJ

Flow

)

tA

I

b I

s

Sl

S

T

- ~

J

~)

2-lt) MIlE WlnlrNIdorwIlnwOMntI 731108 Mldt Page I of 12

QYIIlkN1 bull 20 poIDIIl COnt_ eM fo11ow1ng four different reBponae8 to the aeme new hom and tty to match ellGh IpOfISe with bull -mecr t model (egbull moneteritt model overshooting model etc) none 0 the named- t modele can explain a particular market ponbullbull diagram (Ibullbull there Ia no appropttate model) that there bullbull no applicable model Which mod bull bull have you n depicting the reality bHt aner the liquidity InJection due to the ut)prlme mortgag cril In 2007-11

Newaannounced at It US money suppty grew by 52 bUlion In the moat recent week

Atsumfng that the COIlaenlUl rurtctt forecast on mon~ supply growth wal $1 bRilon the realized money OIDWth s poaltlve lurprise

[An[ to Ruedon It 20 polOll]

Response (8)

Nominal i 7c)rate _I-ampSIP)-~---

us ptiCtllavelJ

$ intateslrate ltY

US money lupply J

CD

It tz TIme

Model Name tv( OI~1t tv(D~eJ

ltD As monty slAfply ~HlM) ~s ~ psi~ s~pNJ~ tM JnAktt

DtWS A hh mo~y t-ltffly is ~ bt ~1~Jvt

(j) Ass~lftt co~pl bullt~ ly fff)l blk ~t4-J~ US AtU I at ofltc(1 NjkT 4

(p If 1Ai1I OA1 tfllt s U1)tJl~t

~ Uj f v uv(1 w() UUSl

gt Ilttltt Mh t~~ Hv a1U

$ i tU MCA tw $ CIJJ~I q~j

1trr~

Response (b)

Nominal exchange rate

($FC)

US price level (i)

$ Interest Iltt

US money supply

I 2 Time

Modal Name~o ApeULAb(f ~teAr

CD Mttkot btU ft ~Iu ~cJuJ1

t~ US WlolAr tAf fIr 5 t-~Mrl () tv Fululaquo 141t MIl w(A eJbullbull)~ N

Q IItuu- tlaquok koSI S 1rtNfA

hlaquo lvH(~ -0 WI jN-~ly

CD ImiddotH~ i 1 +tJfrl 1 k dnv~ (( S $

tJf 1t J bull euroA S l 0 A w lA flJp Mt4 uu~ ty ~A 6shy

-h l~ PfA f _No (j) 5 ~ IU trVU-kt btUevu MA

f ~ ~~ fPr 1i er ~ ~~~ ~ pr4 ULt

Jo ZA tvft c~J

~- (I-~ - shy

shy

~

MSampE 247IJaon1lllnveetmen11 7131108 ~ 1001 t2

bull TkL Wet~1 ~t hut- ktctJ tlu ~t7 Af6I fftt Ufu Iljf~1n ~ tD +Iu S~middot prlt ~tAjt tNsi$ i Joa1-2 5

(ltSrrftoSf (J) I +M DVUctA~~j M-ltfl 01 TN ~k ~ ru

~LI bull

Response (e)

us price level

$ irestrate

us money supply CD

I t2 Time

Model Name tv( 0 d-1ttj t Mo( ~ l

cD MmiddotfCY r(r S Q)(r~tw( n ~~ p~(r

Q) (( S f N ltA lpoundvc- I fWey-yIL ns

p ~rr

6) IA~t r-tt ICIlAJf ~tv)tAftlr

~ l-N fVtA)w ~ t

LlS t wukQIIj Untl~~l

1

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