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Resource: Investment Decision Selection Paper
Prepare a 1,750-2,450-word paper.
Analyze the impact of the foreign exchange and derivatives markets on your
organization and countries in which the organization is considering expansion.
Describe the impact of exchange rate convertibility, bid-ask spreads, real exchange
rates, and the interest rate parity on the relative investment attractiveness of the
countries in your scenario.
Answer the following questions in your paper:
Does purchasing power parity hold? What is its significance?
What happened to the value of the real exchange rate over time? What is the
significance of this change in value?
What are bid-ask spreads for each currency? Include your calculations.
What are implications of the absence or presence of a forward exchange market?
Does interest rate parity hold? What is its significance?
What international arbitrage opportunities exist in your organization? How may the
organization take advantage of these for profit?
Cite data sources you used for calculations. If you used an electronic source, include
the URL. If you used a print source, attach a copy to your paper.
Format your paper consistent with APA guidelines.
Include a minimum of five cited references in the body of the paper.