- Effects of September 11 The terrorist attack on the United States on September 11, 2001, caused expectations of a weaker U.S. economy. Explain how such expectations could have affected U.S. interest rates and therefore have affected the forward rate premium (or discount) on various foreign currencies.
- Interest Rate Parity Explain the concept of interest rate parity. Provide the rationale for its possible existence.
- Inflation Effects on the Forward Rate Why do you think currencies of countries with high inflation rates tend to have forward discounts?
- PPP Explain the theory of purchasing power parity (PPP). Based on this theory, what is a general forecast of the values of currencies in countries with high inflation?
- Implications of IFE Explain the international Fisher effect (IFE). What is the rationale for the exis- tence of the IFE? What are the implications of the IFE for firms with excess cash that consistently invest in foreign Treasury bills? Explain why the IFE may not hold.
- PPP Applied to the Euro Assume that several European countries that use the euro as their currency experience higher inflation than the United States, while two other European countries that use the euro as their currency experience lower inflation than the United States. According to PPP, how will the euro’s value against the dollar be affected?”
2.6. Retirement tourism in the Philippines The Philippine Retirement Authority (PRA) is the mandated government agency to “develop and promote the Philippines as a retirement haven” (Philippine Retirement Authority, n.d.). The PRA only became an attached agency of the DOT upon the enactment of the Republic Act 9593. Their mission is to “provide a globally competitive retirement program in the Philippines for foreign nationals and former Filipinos” as part of the socio-economic development of the country (Philippine Retirement Authority, n.d.). The PRA enjoins DOT’s efforts in promoting their services in various fairs, sales missions, expositions and conferences in the Philippines and abroad (Philippine Retirement Authority, 2017). Retirement tourism is identified as one of the core tourism products within the NTDP. According to the Plan, retirement tourism is “capable of delivering strong future growth with long average length of stay and expenditure” (Department of Tourism, 2012c, p. ix). The Plan identifies the European, Middle East, and North American markets as main targets for this tourism segment. Since the inception of PRA in 1985, it has seen increasing number of foreign retirees in the Philippines (Table 1) that mostly came from China, South Korea, India, United States of America, and Taiwan (Philippine Retirement Authority, 2017). Table 1. Cumulative count of foreign retirees in the Philippines from 1985 to 2017. Year Cumulative count 1985-2012 28,890 2013 32,697 2014 37,485 2015 42,516 2016 48,072 2017 53,933 Despite the PRA not being directly involved in the “It’s more fun in the Philippines” campaign, DOT produces material that are targeted towards retirees. In 2017, DOT launched a video entitled “Sights” that featured M. Uchimura, a Japanese retiree in different destinations in the Philippines (available online: https://www.youtube.com/watch?v=A3xeB4-qv8I). At the end of the video, it was revealed he was not only a retiree, but also a blind man. It was met with criticism online leading to DOT pulling out the commercial following claims around social media that it was strikingly similar to a South African tourism ad (Rappler.com, 2017). However, during the earlier stages of the campaign, only images with older adults as subjects were produced from the campaign and did not necessarily aim to attract older adults to retire in the country. Nevertheless, these photographs contribute to the images and perceptions of the Philippines as a retirement destination. 3. Theoretical Framework>GET ANSWER