University of Notre Dame                                                                  
Mendoza College of Business
 
 

Finance 40500

International Finance

Note: The Final Exam is scheduled for Friday, December 15th from 1:45-3:45 in DBRT 141

"Because the exchange rate is changed infrequently and only to meet substantial difficulties, a change tends to come well after the onset of difficulty, to be postponed as long as possible, and to be made only after substantial pressure on the exchange rate has accumulated.  In consequence, there is seldom any doubt about the direction in which an exchange rate will be changed, if it is changed. In the interim between the suspicion of a possible change in the rate and the actual change, there is every incentive to sell the country's currency if a devaluation is expected or buy if an appreciation is expected."

-Milton Friedman ("The Case for Flexible Exchange Rates", in Essays in Positive Economics, 1953)

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