Is there a forward discount anomaly?

Table of contents
1. INTRODUCTION 3
1.1. STATEMENT OF THE PROBLEM 3
1.2. BACKGROUND OF THE THESIS 4
1.3. THE SIGNIFICANCE OF THE THESIS 6
1.4. OBJECTIVES AND STRUCTURE 8
2. LITERATURE REVIEW 9
2.1．THE EFFICIENT MARKET HYPOTHESIS 9
2.2. THE DODGE METHODS OF THE EXCHANGE RATE RISK 12
3．EMPIRICAL RESEARCH ON THE THESIS 14
3.1. THE RELATED RESEARCH ON UEE 14
3.2. THE RELATED EMPIRICAL STUDY IN UFRH 17
4. METHODOLOGY 19
4.1. INTRODUCTION 19
4.2. VALIDITY AND RELIABILITY OF THE RESEARCH 19
4.3. QUANTITATIVE APPROACH TO THE RESEARCH 20
4.4. RESEARCH METHOD 21
4.5. DATA DESCRIPTION 22
5．RESULTS AND ANALYSIS 23
6．CONCLUSION 39
7 BIBLIOGRAPHY 40
8 APPENDIX 43

Abstract
Exchange rate plays an increasingly important role in the economic system. Forward and spot rate are the two crucial elements in the exchange rate market, to find the certain relation between these two rates have become one of the major issue to nowadays economists. This paper discussed the issue via various ways of estimators and a set of reference is provided.
Are frequent changes in freely floating exchange rates attributable to stabilizing speculation reflecting changes in the fundamental determina英语论文网 【http://www.51lunwen.org】nts of currencies; or to destabilizing behaviors of various kinds, driving prices away from fundamentals, and creating "excess" volatility? This paper, motivated by the need to assess appropriate tests for efficiency for the foreign exchange markets, has the following objectives: (i) briefly to survey the empirical methodology for testing market efficiency in the foreign exchange market, with an emphasis on integrating the new co-integration methodology; (ii) highlighting the significant data difficulties in empirical work, given controls and frequent structural breaks, for the use of these techniques in England; (iii) illustrating the way in which some of these techniques can be applied in England; and (iv) suggesting further research on efficiency that could be carried out using similar data.

Keywords: exchange rate   forward rate unbiased hypothesis   exchange rate mechanism