We can use the asset approach to both make predictions about how the market will react to

Question:

We can use the asset approach to both make predictions about how the market will react to current events and understand how important these events are to investors. Consider the behavior of the Union/Confederate during the Civil War. How would each of the following events affect the defined as Confederate dollars per Union dollar, EC$/$?
a. The Confederacy increases the money supply by 2,900% between July and December of 1861.
b. The Union Army suffers a defeat in Battle of Chickamauga in September 1863.
c. The Confederate Army suffers a major defeat with Sherman’s March in the autumn of 1864.
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...