Since the financial globalization has expanded and developed increasingly fast in recent years, the international parity relationships have been extensively studied due to their importance in international trade and investment. This paper investigates purchasing power parity (PPP), interest rate parity (IRP) and unbiased expectation hypothesis by analyzing three main currencies; UK sterling, Japanese Yen and US dollar during 2008 to 2010. Further, forward premium or discount is calculated and interpret in the study with time series data and ordinary least square (OLS) regression methodologies. It was found that, the unbiased expectation hypothesis and international interest parity holds for Japan-US case but does not hold for Japan-UK case. Finally, the purchasing Power Parity (PPP) holds for both two cases, which is varies with most previous literature.
| Published in | International Journal of Economics, Finance and Management Sciences (Volume 2, Issue 6) |
| DOI | 10.11648/j.ijefm.20140206.18 |
| Page(s) | 356-361 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
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Copyright © The Author(s), 2024. Published by Science Publishing Group |
Testing the Foreign Exchange Parity Relations: A Case Analysis of UK Sterling, Japanese Yen and Us Dollar
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APA Style
Ibrahim Zubairu. (2014). Testing the Foreign Exchange Parity Relations: A Case Analysis of UK Sterling, Japanese Yen and Us Dollar. International Journal of Economics, Finance and Management Sciences, 2(6), 356-361. https://doi.org/10.11648/j.ijefm.20140206.18
ACS Style
Ibrahim Zubairu. Testing the Foreign Exchange Parity Relations: A Case Analysis of UK Sterling, Japanese Yen and Us Dollar. Int. J. Econ. Finance Manag. Sci. 2014, 2(6), 356-361. doi: 10.11648/j.ijefm.20140206.18
AMA Style
Ibrahim Zubairu. Testing the Foreign Exchange Parity Relations: A Case Analysis of UK Sterling, Japanese Yen and Us Dollar. Int J Econ Finance Manag Sci. 2014;2(6):356-361. doi: 10.11648/j.ijefm.20140206.18
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Download@article{10.11648/j.ijefm.20140206.18,
author = {Ibrahim Zubairu},
title = {Testing the Foreign Exchange Parity Relations: A Case Analysis of UK Sterling, Japanese Yen and Us Dollar},
journal = {International Journal of Economics, Finance and Management Sciences},
volume = {2},
number = {6},
pages = {356-361},
doi = {10.11648/j.ijefm.20140206.18},
url = {https://doi.org/10.11648/j.ijefm.20140206.18},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20140206.18},
abstract = {Since the financial globalization has expanded and developed increasingly fast in recent years, the international parity relationships have been extensively studied due to their importance in international trade and investment. This paper investigates purchasing power parity (PPP), interest rate parity (IRP) and unbiased expectation hypothesis by analyzing three main currencies; UK sterling, Japanese Yen and US dollar during 2008 to 2010. Further, forward premium or discount is calculated and interpret in the study with time series data and ordinary least square (OLS) regression methodologies. It was found that, the unbiased expectation hypothesis and international interest parity holds for Japan-US case but does not hold for Japan-UK case. Finally, the purchasing Power Parity (PPP) holds for both two cases, which is varies with most previous literature.},
year = {2014}
}
TY - JOUR T1 - Testing the Foreign Exchange Parity Relations: A Case Analysis of UK Sterling, Japanese Yen and Us Dollar AU - Ibrahim Zubairu Y1 - 2014/12/27 PY - 2014 N1 - https://doi.org/10.11648/j.ijefm.20140206.18 DO - 10.11648/j.ijefm.20140206.18 T2 - International Journal of Economics, Finance and Management Sciences JF - International Journal of Economics, Finance and Management Sciences JO - International Journal of Economics, Finance and Management Sciences SP - 356 EP - 361 PB - Science Publishing Group SN - 2326-9561 UR - https://doi.org/10.11648/j.ijefm.20140206.18 AB - Since the financial globalization has expanded and developed increasingly fast in recent years, the international parity relationships have been extensively studied due to their importance in international trade and investment. This paper investigates purchasing power parity (PPP), interest rate parity (IRP) and unbiased expectation hypothesis by analyzing three main currencies; UK sterling, Japanese Yen and US dollar during 2008 to 2010. Further, forward premium or discount is calculated and interpret in the study with time series data and ordinary least square (OLS) regression methodologies. It was found that, the unbiased expectation hypothesis and international interest parity holds for Japan-US case but does not hold for Japan-UK case. Finally, the purchasing Power Parity (PPP) holds for both two cases, which is varies with most previous literature. VL - 2 IS - 6 ER -
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