Does purchasing power parity hold for the iranian rial

Reference no: EM133630502

Question: Read the following minicase and test whether the relative purchasing power parity holds for the Iranian rial-U.S. dollar and Nigerian naira-U.S. dollar exchange rates. Prominent Currency Fund specializes in investing in currency markets of the world. Mr. Jack Hancock, an experienced hand in international investment and your boss, is currently interested in Iranian and Nigerian currency markets. He is quite concerned with the volatile exchange rates of the Iranian rial and Nigerian naira. He would like to understand what drives Iranian and Nigerian exchange rates. Because the inflation rates are much higher in Iran and Nigeria than in the United States, he thinks that purchasing power parity may be holding at least to some extent. As a research assistant for him, you are assigned to check this out. In other words, you have to study and prepare a report on the following question:

Does purchasing power parity hold for the Iranian rial-U.S. dollar and Nigerian naira-U.S. dollar exchange rates? Among other things, Mr. Hancock would like you to do the follow

Reference no: EM133630502

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