Carry Trade and Purchasing Power Parity, business and finance homework help

1. An investor may seek carry trade opportunities in emerging markets. How can an investor weight technically the exchange risk, the volatility , and the return of an asset while seeking a carry trade in an emerging market?

2. Provide an example where an American investor borrows money in the U.S. at a low price and invest it in a German bank where the interest rate is higher. What are the possible return scenarios in connection with dynamic of the U.S. dollar /Euro exchange rate?

3. Assume that the Grexit took place and major macro fundamentals reacted to it. As an American investor, what other variables should you consider besides Purchasing Power Parity (PPP) if you want to predict returns from a portfolio investment in France?

*At least 3 APA references for each

*must be scholarly/academic

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