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E2. Assume that you are responsible for managing foreign exchange risk at a small U.S. firm and you need to predict future dollar exchange rates
E2. Assume that you are responsible for managing foreign exchange risk at a small U.S. firm and you need to predict future dollar exchange rates in one week. Your project involved payment in Japanese Yen for services rendered. Assume you are talking with an experienced foreign exchange trader. What theory will the foreign exchange trader expect you to use to predict future exchange rates for the Japanese Yen? Purchasing power parity Balance of payments Efficient markets
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