{"id":182626,"date":"2018-02-20T23:50:30","date_gmt":"2018-02-20T23:50:30","guid":{"rendered":"https:\/\/writemyessayfree.com\/the-profitability-of-carry-trade-relative-to-forecasting-based-trading-in-the-foreign-exchange-market"},"modified":"2018-10-24T09:27:49","modified_gmt":"2018-10-24T09:27:49","slug":"the-profitability-of-carry-trade-relative-to-forecasting-based-trading-in-the-foreign-exchange-market","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/the-profitability-of-carry-trade-relative-to-forecasting-based-trading-in-the-foreign-exchange-market\/","title":{"rendered":"The Profitability of Carry Trade Relative to Forecasting-Based Trading in the Foreign Exchange Market"},"content":{"rendered":"<p>The objective of this project is to compare the profitability of carry trade and that of forecasting-based trading in the FX market. Carry trade entails going short on a low-interest currency and long on a high-interest currency. Forecasting-based trading involves going short or long on the low-interest currency, depending on exchange rate forecasting. Comparison is based on measures of return, risk and risk-adjusted return.<\/p>\n<p>The empirical work involves the following tasks:<\/p>\n<ol>\n<li><strong> Identification of Currencies and Variables<\/strong><\/li>\n<\/ol>\n<p>You will be provided with quarterly data covering the period 2001:1-2010:3, involving two countries on the following variables: the exchange rate between the two underlying currencies, two interest rates, two consumer price indices and two stock price indices. One of the currencies (currency <em>x<\/em>) is the funding currency (the currency denominating the short position) and the other currency (currency <em>y<\/em>) is the target currency (the currency denominating the long position).<\/p>\n<p>Exchange rates are typically measured against the dollar. You must calculate the exchange rate between your assigned currencies,, such that\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The objective of this project is to compare the profitability of carry trade and that of forecasting-based trading in the FX market. Carry trade entails going short on a low-interest currency and long on a high-interest currency. Forecasting-based trading involves <a href=\"https:\/\/www.benedictsol.com\/blogs\/the-profitability-of-carry-trade-relative-to-forecasting-based-trading-in-the-foreign-exchange-market\/\" class=\"read-more\">Read More &#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-182626","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/182626","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=182626"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/182626\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=182626"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=182626"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=182626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}