International Fisher Effect and Speculative motive: Difference between pages

Revision as of 14:30, 9 June 2016

A desire to hold money to allow an individual or firm to take advantage of potential investments which offer a higher rate of return.

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-This theory predicts that the spot foreign exchange rate will change over time to reflect and offset differences in interest rates in the respective currencies.
+A desire to hold money to allow an individual or firm to take advantage of potential investments which offer a higher rate of return.
-So for example, unhedged currency depreciation losses will on average negate and match exactly any gains on interest differentials between the two currencies.
 == See also ==
-* [[Carry trade]]
+* [[Liquidity preference]]
-* [[Depreciation]]
-* [[Expectations theory]]
-* [[Fisher Effect]]
-* [[Four way equivalence model]]
-* [[Interest rate parity]]
-* [[Purchasing power parity]]
-* [[Spot rate]]
-[[Category:The_business_context]]
-[[Category:Identify_and_assess_risks]]
-[[Category:Manage_risks]]
-[[Category:Cash_management]]
-[[Category:Financial_products_and_markets]]
-[[Category:Liquidity_management]]