arbitrage(国际金融香港大学,WONGKaFu).pptx

An Introduction to  Exchange Rate Determination;How would you explain the movement of Japanese Yen? (source: merce.ubc.ca/xr/plot.html);How would you explain the movement of Japanese Yen? (source: merce.ubc.ca/xr/plot.html);How would you explain the movement of European Euros? (source: merce.ubc.ca/xr/plot.html);How would you explain the movement of European Euros? (source: merce.ubc.ca/xr/plot.html);How do we explain the movement of foreign exchange?;UC MacDonald;What would you do?;Effect of our action;UC MacDonald;Punch line:;HK MacDonald;HK MacDonald;Arbitrage activities continue until prices equalize. ;Prices at different locations, when expressed in the same currency, have to equalize. That is, ;If e is fixed, PUS has to adjust when there is a change in PHK . ;Other arbitrage opportunities across space;Arbitrage opportunities across space;Other arbitrage opportunities across space;Arbitrage across time;Arbitrage across time in real life;What does PPP tell us about exchange rates;HK’s Big Mac;Why is Big Mac Index so far off from the actual exchange rates?;The Idea of Hong Kong’s Currency board;The Idea of Hong Kong’s Currency board;Why would the supply of HK dollar fall into a shortage when speculators attack HKD?;Who would trade with you? ;Effect of high interest rate?;When will interest rate return to a “normal” level?;Will interest rate be back to the normal level if the government go fishing or golfing?;- End -;Prices at different locations, when expressed in the same currency, have to equalize. That is, ;Speculators attack HKD because they expect HKD to devalue. E.g., from 1:7.8 to 1:15.6.;9、春去春又回，新桃换旧符。在那桃花盛开的地方，在这醉人芬芳的季节，愿你生活像春天一样阳光，心情像桃花一样美丽，日子像桃子一样甜蜜。6月-216月-21Wednesday, June 2, 2021 10、人的志向通常和他们的能力成正比例。12:09:4012:09:4012:096/2/2021 12:09:40 PM 11、夫学须志也，才须学也，非学无以广才，非志无以成学。6月-2112:09:4012:09Jun-2102-Jun-21 12、越是无能的人，越喜欢挑剔别人的错儿。12:09:4012:09:4012:09Wednesday, June 2, 2021 13、志不立，天下无可成之事。6月-216月-2112:09:4012:09:40June 2, 2021 14、Thank you very much f