Four-way equivalence modelForums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Four-way equivalence modelThis topic has 1 reply, 2 voices, and was last updated 2 years ago by John Moffat.Viewing 2 posts - 1 through 2 (of 2 total) AuthorPosts June 3, 2021 at 5:30 pm #622983 HamzaYusufParticipantTopics: 41Replies: 20☆☆Sir, can you please explain about the Four-way equivalence model? June 4, 2021 at 7:12 am #623042 John MoffatKeymasterTopics: 56Replies: 53865☆☆☆☆☆In theory, future spot exchange rate are determine by the inflation rates in the two countries – purchasing power parity.Forward exchange rates are determined by the interest rates in the two countries – interest rate parity.In theory, interest rates and inflation rates are linked in that they move up and down together – the Fisher formula.Therefore, in theory, future spot exchange rates should be equal to the forward rates.AuthorPostsViewing 2 posts - 1 through 2 (of 2 total)You must be logged in to reply to this topic.Log In Username: Password: Keep me signed in Log In