Formula Flashcards by Patricia Paguio

Q

Weighted nominal effective exchange rate (arithmetic)

A

Et = sum(wtVt)

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Q

Trade-weighted average

A

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

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Q

Normalised weights

A

w = wi / sum(wi)

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Q

Unweighted nominal effective exchange rate (arithmetic)

A

Et = average of all Vt

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Q

Nominal effective exchange rate (geometric weighted average)

A

Et = product(V^w)

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Q

Relative exchange rate

A

Vt = St/S0

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Q

Real exchange rate

A

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

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Q

Real effective exchange rate (arithmetic)

A

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

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Q

Real effective exchange rate (geometric)

A

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

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Q

Foreign currency value of imports (Demand)

A

Df = Qm x Pm*

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Q

Foreign currency value of exports (Supply)

A

Sf = Qx x Px*

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Q

PPP

A

P = S(d/f) x P*

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Q

LOP

A

Pi = S(d/f) x Pi*

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Q

RPPP

A

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

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Q

Quantity theory

A

P = M/(kY)

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Q

CIP

A

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

Q

Forward margin

A

f = (F - S)/S

Q

Approximate CIP

A

i = f + i*

Q

UIP

A

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

Q

Approximate UIP

A

i = se + i*

Q

Exchange rate spread

A

se = (Se - S) / S

Q

Mean absolute error (MAE)

A

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

Q

Mean squared error (MSE)

A

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

Q

Real mean square error (RMSE)

A

RMSE = root(MSE)

Forward spread

f = (F - S) / S

Expected Value

E[X] = sum(pi x Si)

Variance

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

Population mean

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

Sample variance

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

Mean absolute deviation (MAD)

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

Downside semi-variance (DSV)

1/(n-1) sum(Sn - S(bar))^2 | for Sn < S