Determining Whether IFE Holds
Use an online data source to record the interest rate differential between the interest rate of the foreign country
in which you plan to do business and the U.S. interest rate over the last five or so quarters. Then, review the
exchange rate percentage change in the foreign currency of concern over each of those corresponding
quarters to determine whether the international Fisher effect (IFE) appears to hold over those quarters for that
currency.
Chapter 9 Running Your Own MNC
Monitoring Exchange Rate Trends
- Use an online source to determine how the value of the foreign currency of concern has changed in each of
the last five weeks. Does it appear that there is a trend over the last five weeks? If you believed that the
currency’s value would continue following the recent trend, would it appreciate or depreciate in the near future?
You will be developing an idea for creating an MNC and making decisions as you “run” your company through
this course. Each week you will be guided as to what chapter topics you need to focus on for your business
and complete an essay that focuses on them.
Sample Solution
