In line with the external balance approach, the Real Effective Exchange Rate (REER) is the trade-weighted exchange rate (NEER) adjusted for inflation. As with PPP, the purpose of using REER is to try to gauge an exchange rate’s over- or undervaluation relative to a given norm. As with PPP, using REER is far from an [...]
Archive of posts tagged currency
Financial Statements
We already know that the value of our firm is determined by its underlying projects. We already know that these projects have cash flows that we use in our NPV analyses. So, why should you bother with learning about what companies say in their financials? A rose is a rose is a rose, isn’t it? [...]