Ch 4 · International Financial Management

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5 concept points · 4 formulas · 4 exam-critical points.

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Concept

🗺️ Chart summary

Parity Conditions
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   IRP: F/S = (1+ih)/(1+if)
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   PPP: S₂/S₁ = (1+ih)/(1+if)  [inflation]
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   Fisher: (1+r_nom) = (1+r_real)(1+inflation)
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   International Fisher: relates interest & expected fx change

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