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Flashcards in Formula Deck (31)
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1

Weighted nominal effective exchange rate (arithmetic)

Et = sum(wtVt)

2

Trade-weighted average

w = (Xi + Mi) / sum(Xi + Mi)

3

Normalised weights

w = wi / sum(wi)

4

Unweighted nominal effective exchange rate (arithmetic)

Et = average of all Vt

5

Nominal effective exchange rate (geometric weighted average)

Et = product(V^w)

6

Relative exchange rate

Vt = St/S0

7

Real exchange rate

Q(x/y) = S(x/y) * (Py/Px)

8

Real effective exchange rate (arithmetic)

Qt = sum(w * (Qt/Q0))

9

Real effective exchange rate (geometric)

Qt = product ((Qt/Q0)^wi)

10

Foreign currency value of imports (Demand)

Df = Qm x Pm*

11

Foreign currency value of exports (Supply)

Sf = Qx x Px*

12

PPP

P = S(d/f) x P*

13

LOP

Pi = S(d/f) x Pi*

14

RPPP

change(S(d/f)) = change(P) - change(P*)

15

Quantity theory

P = M/(kY)

16

CIP

(1 + i) = F/S (1 + i*)

17

Forward margin

f = (F - S)/S

18

Approximate CIP

i = f + i*

19

UIP

(1 + i) = Se/S (1 + i*)

20

Approximate UIP

i = se + i*

21

Exchange rate spread

se = (Se - S) / S

22

Mean absolute error (MAE)

MAE = 1/n sum(abs value(St(hat) - St))

23

Mean squared error (MSE)

MSE = 1/n sum(St(hat) - St)^2

24

Real mean square error (RMSE)

RMSE = root(MSE)

25

Forward spread

f = (F - S) / S

26

Expected Value

E[X] = sum(pi x Si)

27

Variance

Var[X] = E[X^2] - E[X]^2

28

Population mean

S(bar) = 1/t sum(St)

29

Sample variance

1/(t-1) sum(St - S(bar))^2

30

Mean absolute deviation (MAD)

MAD = 1/n sum [abs(St - St)]