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All posts for the month May, 2015

Hypothesis Testing – Step 4: State the Decision Rule for Testing the Null Hypothesis

Posted by Bill Campbell III, CFA on May 27, 2015
Posted in: Level I Quantitative Methods.

There are eight articles on hypothesis testing: Synopsis Step 1: State the hypotheses Step 2: Select the appropriate test statistic Step 3: Specify the level of significance Step 4: State the decision rule for testing the null hypothesis (you are here) Step 5: Collect the sample data and calculate the value of the test statistic […]

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Currency Exchange: Forward Discount/Premium

Posted by Bill Campbell III, CFA on May 22, 2015
Posted in: Level I Economics.

Suppose that the spot exchange rate between USD and GBP is USD/GBP 1.5814; i.e., USD 1.5814 = GBP 1.0.  If the 1-year forward exchange rate is USD/GBP 1.5660 (so USD 1.5660 = GBP 1.0), then we say that the GBP is trading at a (one-year) forward discount (versus the USD): the forward price for GBP […]

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