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Q. Why is it useful to make a distinction between debt and equity instruments?
Answer: Debt instruments such as bank deposits and bonds are repaid regardless of economic circumstances. Equity instruments for example a share of stock have a payoff that is linked to economic performances. Though remember the possibility of bankruptcy and the real return which is subject to domestic currency fluctuations.
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Discuss the differences between Absolute PPP and Relative PPP . Answer: Absolute Purchasing Power Parity (PPP) states that the exchange rate between two currencies equals the
Why we Devising an International Monetary System
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