The paper "Analysis of Foreign Exchange Spot Markets" is a wonderful example of a research proposal on macro and microeconomics. This paper is an attempt to dwell on the issue of information and volatility links across financial markets. These variables are contributed by the model proposed by Fleming, Kirby & Ostdek (1998), who has posited that economic or financial connections between two markets are fashioned by the common information that these markets share and the cross-hedging activity or the position that is taken in one market to hedge risk in a position taken in another market.
The period that coincided with the global financial crisis in 2007 until 2009 was specifically identified as a source of FX rates for analysis because instances of crises render the financial markets more volatile than in usual circumstances. It would have been a full-blown subscription to the generalized method of moments (GMM); but, in the course of its statistical treatment of pertinent data, this paper has found out that there seems to be an absence of a strong correlation between the Euro and Yuan FX rates.
To account for this, a brief notation on how Euro and Yuan historically fared during the crisis was provided. Introduction This paper is particularly about information and volatility links across foreign exchange (FX) spot markets (see Treepongkaruna & Gray, 2009), especially during the instance of the global financial crisis in 2007 until 2009. At the start of studies relative to volatility links, the focus by scholars was on equity and other related derivative markets in the US (see Fleming, Kirby & Ostdek, 1998). Recently, it was extended to money, bond, and other derivatives in and out of America.
Fleischer (2003) has adapted the studies of Fleming, Kirby & Ostdek (1998) to the markets in Australia. Antell (2004) examines the volatility links in Finish stock, bond, and money markets. Christiansen (2004) has done a study on volatility spillover from the US and the European markets. Cheong, Nor & Isa (2007) investigate the volatility causal linkages among the eight major sectoral indices in the Malaysian stock market. Cai & Treepongkaruna (n. d.) did more than study either the VRV dynamics in a financial market or the VRV dynamics among financial markets.
Rather, they examined the former in a cross-market context and scrutinized the latter as the intra-market VRV dynamics are under control.
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