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Foreign Asset Returns under Exchange Rate Uncertainty: A Classroom Experiment

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Title: Foreign Asset Returns under Exchange Rate Uncertainty: A Classroom Experiment
Language: English
Authors: Scanlan, Mark
Source: Journal of Education for Business. 2022 97(2):133-138.
Availability: Routledge. Available from: Taylor & Francis, Ltd. 530 Walnut Street Suite 850, Philadelphia, PA 19106. Tel: 800-354-1420; Tel: 215-625-8900; Fax: 215-207-0050; Web site: http://www.tandf.co.uk/journals
Peer Reviewed: Y
Page Count: 6
Publication Date: 2022
Document Type: Journal Articles
Reports - Descriptive
Education Level: Higher Education
Postsecondary Education
Descriptors: Undergraduate Students, Economics Education, Class Activities, Educational Experiments, Macroeconomics, Instructional Design, Risk, Investment, International Trade, Educational Games, Monetary Systems, Group Activities
DOI: 10.1080/08832323.2021.1895044
ISSN: 0883-2323
Abstract: This paper provides details on a classroom experiment that focuses on returns to foreign assets given uncertain future exchange rates. Students are assigned the role of foreign analysts and decide how much to invest abroad given their expectations about future exchange rates. The experiment allows students to practice calculating the returns to foreign investments, understand the benefits to skill in predicting future exchange rates, and observe the limitations to that skill. The experiment is ideal for undergraduate students in macroeconomics or international economics courses in a classroom that would allow students to separate into distinct groups.
Abstractor: As Provided
Entry Date: 2022
Accession Number: EJ1328327
Database: ERIC
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  Value: <anid>AN0155030560;jeb01feb.22;2022Feb04.07:44;v2.2.500</anid> <title id="AN0155030560-1">Foreign asset returns under exchange rate uncertainty: A classroom experiment </title> <p>This paper provides details on a classroom experiment that focuses on returns to foreign assets given uncertain future exchange rates. Students are assigned the role of foreign analysts and decide how much to invest abroad given their expectations about future exchange rates. The experiment allows students to practice calculating the returns to foreign investments, understand the benefits to skill in predicting future exchange rates, and observe the limitations to that skill. The experiment is ideal for undergraduate students in macroeconomics or international economics courses in a classroom that would allow students to separate into distinct groups.</p> <p>Keywords: Economics; international business education; instructional design</p> <hd id="AN0155030560-2">Introduction</hd> <p>Grasping the complexities of exchange rates is challenging for undergraduate students. Extending the basic concept of a spot exchange rate to learning about uncertain expected future rates adds an additional level of difficulty for students. In order to keep this topic from becoming too esoteric, we employ a classroom experiment that allows students to actively participate in learning this subject. The focus of this experiment is to explore the role of expected future exchange rates on returns to foreign securities. It draws heavily on concepts from both international trade and international finance and is designed for students to consider the real-world difficulties involved in purchasing foreign securities.</p> <p>The motivation for the experiment is similar to Frank ([<reflink idref="bib4" id="ref1">4</reflink>]) who finds that classroom experiments "serve as a good starting point for discussion and interpretation of a problem," and they can be important for developing long-term memory of a topic. While the benefits of active learning are well established (see Freeman et al. ([<reflink idref="bib5" id="ref2">5</reflink>]) and Becker, Becker, and Watts ([<reflink idref="bib1" id="ref3">1</reflink>])), Durham, McKinnon, and Schulman ([<reflink idref="bib3" id="ref4">3</reflink>]) find that classroom experiments extend beyond this by creating an enthusiasm for economics which can improve cognition and retention of material. The specific experiment we use draws from Mitchell, Hunsader, and Parker ([<reflink idref="bib7" id="ref5">7</reflink>]) who have students negotiate futures contracts, Mitchell, Rebelein, Schneider, Simpson, and Fisher ([<reflink idref="bib8" id="ref6">8</reflink>]) who designed an experiment around exchange markets, and Johnson ([<reflink idref="bib6" id="ref7">6</reflink>]) that introduces uncertainty in the form of "news" into his experiment. We also build on Cartwright and Stepanova ([<reflink idref="bib2" id="ref8">2</reflink>]) that find writing a report after a classroom experiment leads to better retention of material. They find retention can be strengthened even more by employing a period of classroom reflection after the experiment.</p> <p>Our experiment can be run in classrooms of any size and works best if students are split into groups to work together. The experiment involves problem solving, group interactions, links to concepts in both economics and finance, and discussions of real-life applications and relevance. After completing the experiment, students should have a deeper understanding of spot versus expected future exchange rates, the returns from purchasing foreign securities, uncertainty in the foreign exchange market, and the return to skill in the foreign exchange market, along with the limits on this skill. We also find that the average score on exam questions related to these issues climbed by 14.6% after implementing this experiment even while the average score on the exams overall fell by 3.7%.</p> <hd id="AN0155030560-3">Teaching points</hd> <p>This exchange rate experiment addresses some important teaching points regarding uncertainty, risk, and skill that are useful over the entire semester. Allowing independent student discovery during an experiment helps the concepts stick and provides an anchor for our discussions in the class for the rest of the year. The four key teaching points are listed below.</p> <hd id="AN0155030560-4">The difference in a spot rate and an expected future exchange rate</hd> <p>Students often find the idea of an expected future exchange rate too abstract and assume it is a known entity like a current spot rate. One goal of this experiment is to show students that the expected future exchange rate is just a prediction and can turn out to be incorrect in the future. Therefore, making investment decisions based on expected future exchange rates can be risky. This adds an important element to our discussion as students investigate questions such as whether someone should invest in domestic securities or look abroad for investment opportunities. Specifically, it models that investors need to examine two dimensions with respect to foreign investments: the expected return on the securities and the potential gains or losses from changes in the exchange rate over time.</p> <hd id="AN0155030560-5">Calculation of returns from foreign securities</hd> <p>One of the initial motivations for this experiment was to try and find a way to encourage students to practice solving for returns on foreign investment. This is not a calculation that is intuitive to students, and we find they benefit greatly from repetition in calculation. Therefore, in every round of the experiment students are asked to calculate the return from the investment they chose. The calculation becomes almost like an aside to them within the experiment, and they soon find themselves solving the equation quickly and correctly.</p> <hd id="AN0155030560-6">The return to skill in the foreign exchange market</hd> <p>We find that it is useful to highlight the benefits to skill within this experiment. We want students understanding that greater skill in predicting expected future exchange rates can lead to higher returns. This is intended to motivate students in the subsequent lessons in the class where we discuss how do predict future rates. If students see these predictions as an important part of a money making process they will be more likely to be engaged in future lectures. We want them to grasp that the human capital gained in field specific courses can lead to returns once they graduate from school. Every year since we first implemented this experiment we have found students to be more engaged in our subsequent discussions of exchange rates than in the previous years. Students began referring back to the situations they encountered in the experiment as we progressed into new material.</p> <hd id="AN0155030560-7">Limits to skill in the foreign exchange market</hd> <p>This teaching point may seem to contradict the previous one, but it plays an important role in the experiment. The idea that even the smartest financial minds can make bad predictions is an important reality for students to understand. This often leads to some of the most intense discussions after the experiment as students relate it to their personal lives or information they have learned about investors. The goal of this teaching point is to have students realize that more human capital improves predictions but will not lead to perfect accuracy. It is best to let students discover this concept on their own by allowing the class to expand on their thoughts relating to this point with as little prompting from the moderator as possible.</p> <hd id="AN0155030560-8">Experiment set-up</hd> <p>This classroom experiment is started soon after the concept of exchange rates is covered and before the concept of interest parity across countries is examined. Students should be split into groups of 3–5 people and if possible, physically separate the groups as much as possible. Distance between groups allows for more discussion without the fear of other groups overhearing strategy decisions. Each group should have scratch paper and a calculator ready before the experiment starts. Each group is then given the worksheet for the experiment that outlines the rules and has a table to keep track of their results.</p> <hd id="AN0155030560-9">Starting assumptions</hd> <p>Each group is told to act as an investor in foreign securities and is awarded a fictitious $60 each round to potentially invest in a Japanese bond. They are given a fixed spot exchange rate that does not change in each round, given as E<subs>$/¥</subs>. They are also given a fixed interest rate return on the yen-based bonds, R<subs>¥</subs>, that also does not change in each round. Finally, they are given three possible expected future exchange rates, E<sups>e</sups><subs>$/¥,</subs> that could occur one year from now when the bond matures. The first of these rates is larger than the current spot rate and is labeled "UP," the second is smaller than the spot rate and is labeled "DOWN," and the last is very low and labeled "CRASH."</p> <hd id="AN0155030560-10">Explaining the gameplay</hd> <p>Careful consideration should be given to explaining how the experiment will be run so all students feel ready to participate fully. To achieve this, we always run at least one practice round after we have explained the rules and gameplay. Students are told that at the start of each round one representative from each group should come to the front of the class and roll a die. The number on the die represents that group's skill level for the round. On the desk at the front of the room are six notecards that are facedown and have the words "UP," "DOWN," and "CRASH" written on them. Students are told they can look at as many of the cards as their skill level allows. For example, if the representative rolled a 4, they can secretly look at 4 of the cards. The representative then goes back to the group and relays what they have seen. Groups then need to decide how much of their $60 they want to invest based on the information they have learned. They are told that once everyone has made their decisions the experiment moderator will randomly choose one of the face-down cards that will represent what actually happened to the exchange rate when the bond matures.</p> <p>At this point in gameplay, explanation depth depends on the knowledge level of students in the class and can include walking through the following steps with students:</p> <p></p> <ulist> <item> Assume E<subs>$/¥</subs> = 2, R<subs>¥</subs> = 10%</item> <p></p> <item> Can buy 1 Yen for $2.</item> <p></p> <item> Since the return on Yen based assets is 10%, after 1 year that 1 Yen becomes 1.1 Yen.</item> <p></p> <item> Need to convert this 1.1 Yen back to dollars. 3 possibilities</item> <p></p> <item> If E<sups>e</sups><subs>$/¥</subs> = 2.5 ("UP") then the dollar amount = 1.1 × 2.5 = $2.75</item> <p></p> <item> This means $2 became $2.75 which is growth rate of 37.5%</item> <p></p> <item> If E<sups>e</sups><subs>$/¥</subs> = 1.5 ("DOWN") then the dollar amount = 1.1 × 1.5 = $1.65</item> <p></p> <item> This means $2 became $1.65 which is growth rate of –17.5%</item> <p></p> <item> If E<sups>e</sups><subs>$/¥</subs> = 0 ("CRASH") then the dollar amount = 1.1 × 0 = $0</item> <p></p> <item> This means $2 became 0 and you lose all money invested.</item> <p></p> <item> Finding Results</item> </ulist> <p>Assume you invested $40 out of your $60:</p> <p></p> <ulist> <item> If the outcome was UP, you earn $20 + $40 × (1.375) = $75</item> <p></p> <item> If the outcome was DOWN, you earn $20 + $40 × (0.825) = $53</item> <p></p> <item> If the outcome was CRASH, you earn $20 + $40 X (0) = $20</item> </ulist> <p>Note that these are just example numbers from a simple form of the experiment. We have developed multiple modifications for this experiment that will be discussed in a later section.</p> <hd id="AN0155030560-11">Clarifications</hd> <p>Now that students have a general idea of how the experiment will run, it is best to make a few clarifying remarks. Inform students the maximum they can invest in the Japanese bond is $60 each round regardless of how much money they have accumulated in previous rounds. Make sure students also understand they do not need to invest all $60 each round. As shown in the example above, if students invest $40 out of their $60 then $20 is guaranteed to remain the same while the $40 is subject to the foreign return and change in exchange rates. Therefore, if a group is certain there will be a crash, investing $0 in the foreign security guarantees they can safely have all $60 at the end of the round. Students are then walked through how to use the table (Table 1) to keep track of their returns.</p> <p>Table 1. Student data sheet.</p> <p> <ephtml> <table><thead><tr><td>(1)</td><td>(2)</td><td>(3)</td><td>(4)</td><td>(5)</td><td>(6)</td></tr><tr><td>Round</td><td>Amount Not Invested</td><td>Amount Invested</td><td>UP, DOWN, or CRASH</td><td>Ending Dollar Amount for Period</td><td>Running Total</td></tr></thead><tbody valign="top"><tr><td>Practice</td><td /><td /><td /><td /><td /></tr><tr><td> 1</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td> 2</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td> 3</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td> 4</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td> 5</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td></tr></tbody></table> </ephtml> </p> <hd id="AN0155030560-12">Practice round</hd> <p>In the practice round students send up a representative, roll the die, and look at the cards on the desk. They then go back to their group and pick an amount to invest. Once they have decided on an amount between $0 and $60, they are asked to write it in column 3 of the practice row from Table 1. They then write the amount that was not invested in column 2. Once all groups have completed these steps the experiment moderator randomly chooses one of the six cards and then has students write down the word "UP, "DOWN," or "CRASH" in column 4. Each group then goes through the steps outlined above to determine what their return for the year would be, and they write this amount in column 5. Then make sure that all groups understand how to keep a running total in the final column.</p> <hd id="AN0155030560-13">Final preparations</hd> <p>The final task before beginning the experiment officially is to ask if students have any questions. What is important here is what we do not do before the experiment starts. We do not tell students to be careful when looking at the cards to avoid other groups seeing the cards and we do not tell groups to keep their discussions quiet and secret from other groups. We also do not give any suggestions on the best way to play the experiment. This is important since the goal of the experiment is for lessons and strategies to reveal themselves.</p> <hd id="AN0155030560-14">Gameplay</hd> <p>Before the class you should have created sets of 6 cards with each with one word on them "UP," "DOWN," or "CRASH" on them. The number of sets you create should match the number of rounds you intend to complete, plus an extra set for practice. You can use any mix within each set, but we usually try to have at least one round that is mostly "UP," one that is mostly "DOWN," and one that is mostly "CRASH." Have each set of cards marked with its corresponding round so you can efficiently move to the next set when a round ends.</p> <p>The gameplay itself will run quickly and smoothly if time is taken to explain the experiment properly and allow for a practice round. After you randomly select a card at the end of each round you can announce to the class what the 5 other cards were. This is not required, but repeated use of this experiment has shown that it makes the gameplay more enjoyable. It is important to actively monitor gameplay after round 2 and make sure each group is correctly keeping a running total and filling out their table appropriately. After the last round, have students calculate their totals and announce the winning team.</p> <hd id="AN0155030560-15">Reflection</hd> <p>It is important to allot time at the end of the experiment for reflection on what happened and allow students to discuss their chosen strategies. We find it is best to do this immediately following the experiment, and that waiting until the next class to do the reflection decreases participation in the discussion considerably. The key questions that need to be addressed in the discussion are:</p> <p></p> <ulist> <item> What strategy did your group use to decide how much to invest during the experiment?</item> <p></p> <item> What is the equivalent to rolling a high number in real life?</item> <p></p> <item> Was rolling a high number beneficial in the experiment?</item> <p></p> <item> Did you always predict correctly when you had a high number on your roll?</item> <p></p> <item> If the interest rate in the U.S. had been 10% over this period and you had put your $60 in U.S. bonds, would you have ended up with more or less money than you earned from the foreign investments you did in the experiment?</item> </ulist> <p>If time permits, it would be beneficial to allow students to consider each question above individually before opening the discussion. This will result in a deeper reflection for each student and will allow them to see if their insights match with the class consensus developed during the discussion. The goal of this discussion is to encourage students to speak and reflect on the experiment and is not the time for you to explain all the intricacies of the learning objectives. Students generally do a great job of connecting the dice rolls to skill and realizing that it helped their predictions but was not infallible. We end the class by assigning a short writing assignment to students. The assignment has students connect this experiment to a real-life situation an investor may face. We start the next class discussing what they wrote and clarifying any teaching points that have not been fully addressed.</p> <hd id="AN0155030560-16">Modifications</hd> <p>We have run this experiment numerous times and used a variety of modifications that have worked to varying degrees. The most valuable aspect of the experiment is that different parts can be adjusted depending on the skill level of students or based on the key teaching points being addressed. The following is a list of several modifications we have tried within the experiment.</p> <hd id="AN0155030560-17">Fixed skill</hd> <p>One of the first modifications we tried was to fix a skill level for each group. This can be achieved in a variety of ways. The groups could compete to earn skill before the experiment starts, or it could be assigned randomly. To assign it randomly we had them roll the die once at the start of the experiment and that was their skill for all rounds. We have also tried pulling the "skill" component out altogether and letting all groups see all the cards each round. This still worked but seemed to be less engaging for students.</p> <hd id="AN0155030560-18">Domestic return in assets</hd> <p>A variation we use often is to have any money not invested in foreign assets be invested domestically at a given interest rate. We usually adjust this rate once during the experiment to encourage a discussion afterwards about how changes in the domestic rate impacted their decisions to invest abroad.</p> <hd id="AN0155030560-19">Multiple countries</hd> <p>In an effort to make the experiment more realistic we have tried expanding the number of countries students could invest in each round. We chose 4 countries, and for each country we gave a spot rate, a bond rate, and an expected future exchange rate and students could choose to invest in any of the countries. In our version we also changed these numbers after each round. We enjoyed this variation and believe it led to the greatest understanding since groups really had to consider the expected returns for each country before they made their prediction. The problem, however, is this is the most time-consuming version, and we often run out of time before we have had sufficient opportunity to reflect on the experiment in class.</p> <hd id="AN0155030560-20">Shared documents</hd> <p>Given our class size has consistently been around 25 students we are able to have small groups and can walk around the classroom to monitor student progress. An interesting alternative that has been suggested, but we have yet to implement, is to have students input their findings into a shared document online in real-time during the experiment. This will not only allow you to verify that groups are correctly calculating their returns for each round, but it will also allow for a visible running total of returns for all groups to see. This could spark a discussion regarding how each groups' strategies evolved based on how they ranked in returns among the other groups.</p> <hd id="AN0155030560-21">Student experience</hd> <p>Student feedback regarding the experiment has been universally positive, as observed in direct student comments to the professor and comments within teacher evaluations at the end of the semester. This positive association with the often-complex topic of exchange rates is encouraging. Technical knowledge improved as well when measured using outcomes on standard classroom exams. For three years after first implementing the classroom experiment two exam questions related to topics covered in the experiment remained qualitatively similar to previous year's questions (these questions have since been combined and expanded into a more in depth question). The first asks students to calculate returns on a foreign investment given an unexpected depreciation of the domestic currency, and the second asks students to discuss the role of human capital on such investment outcomes. Comparing the three years before the implementation of the experiment with the three years after indicates that student success on these questions improved significantly even while overall exam grades stagnated.</p> <p>In the three years prior to first implementing the classroom experiment the average class size was 26 students, the average grade on the exam that covered exchange rates was 78.6%, and the average score on the two questions related to the experiment was 6.6 out of 12 possible points. In the three after the experiment was first introduced the average class size was 22.3 students, the average on the exam was 75.7%, and the average score on the two related questions was 7.57 out of 12. These results indicate that scores increased by 14.6% on questions relating to the topics covered by the experiment. This is especially impressive given that the overall average score on these exams actually dropped by 3.7% over this same period. While this outcome is encouraging it is difficult to disentangle the benefits of the experiment itself on student outcomes from the benefits received due to increased time spent on this topic during the experiment day and follow up discussions. Our long term goal is to design</p> <hd id="AN0155030560-22">Conclusion</hd> <p>Using classroom experiments and games can enhance learning and lead to better retention of information when paired with a writing component. Students also really enjoy a well-designed classroom experiment that can break the monotony of standard lectures. In a time when universities are pushing for increased active and experiential learning, employing classroom experiments and games can be used as a fun way to achieve these important academic goals. This paper is our attempt to provide a starting point for those interested in using an experiment when teaching students about exchange rates and uncertainty.</p> <p>In this classroom experiment we have students use limited information about the future to decide how much to invest in a foreign security. The classroom experiment is intended to reinforce the potential gains and losses that can occur from investing in a foreign security, and to show the role of uncertainty in the model. Students are asked to take on the role of foreign exchange analysts, and each round they are randomly assigned a level of knowledge about the future. They use this level of knowledge about the likelihood of the exchange rate rising, falling, or crashing to decide how much to invest in any given period. The goal of the experiment for students is to earn as much money as possible by the end of the final round.</p> <p>There are several important teaching outcomes that can be achieved through this experiment. First, it illustrates the difference between a spot and an expected future exchange rate. It gives students essential practice calculating the returns to foreign assets in a fun setting. Finally, it illustrates both the returns to skill in the foreign exchange market along with the limits to this skill. We provide numerous modifications that can be implemented in the experiment depending on your specific learning objectives. We also strongly encourage educators to make additional modifications to the experiment that make learning as meaningful as possible for their specific course.</p> <ref id="AN0155030560-23"> <title> References </title> <blist> <bibl id="bib1" idref="ref3" type="bt">1</bibl> <bibtext> Becker, W. E., Becker, S. R., & Watts, M. W. (Eds.). (2006). Teaching economics: More alternatives to chalk and talk. Northampton, MA : Edward Elgar Publishing.</bibtext> </blist> <blist> <bibl id="bib2" idref="ref8" type="bt">2</bibl> <bibtext> Cartwright, E., & Stepanova, A. (2012). What do students learn from a classroom experiment: Not much, unless they write a report on it. The Journal of Economic Education, 43 (1), 48 – 57. doi: 10.1080/00220485.2012.636710</bibtext> </blist> <blist> <bibl id="bib3" idref="ref4" type="bt">3</bibl> <bibtext> Durham, Y., McKinnon, T., & Schulman, C. (2007). Classroom experiments: Not just fun and games. Economic Inquiry, 45 (1), 162 – 178. doi: 10.1111/j.1465-7295.2006.00003.x</bibtext> </blist> <blist> <bibl id="bib4" idref="ref1" type="bt">4</bibl> <bibtext> Frank, B. (1997). The impact of classroom experiments on the learning of economics: An empirical investigation. Economic Inquiry, 35 (4), 763 – 769. doi: 10.1111/j.1465-7295.1997.tb01962.x</bibtext> </blist> <blist> <bibl id="bib5" idref="ref2" type="bt">5</bibl> <bibtext> Freeman, S., Eddy, S. L., McDonough, M., Smith, M. K., Okoroafor, N., Jordt, H., & Wenderoth, M. P. (2014). Active learning increases student performance in science, engineering, and mathematics. Proceedings of the National Academy of Sciences, 111 (23), 8410 – 8415. doi: 10.1073/pnas.1319030111</bibtext> </blist> <blist> <bibl id="bib6" idref="ref7" type="bt">6</bibl> <bibtext> Johnson, P. (2018). Exchange rates: An asynchronous classroom experiment. Journal of Economics Teaching, 3 (2), 207 – 217.</bibtext> </blist> <blist> <bibl id="bib7" idref="ref5" type="bt">7</bibl> <bibtext> Mitchell, D. T., Hunsader, K., & Parker, S. (2011). A futures trading experiment: An active classroom approach to learning. Journal of Economics and Finance Education, 10 (1), 9–27.doi: 10.2139/ssrn.943457</bibtext> </blist> <blist> <bibl id="bib8" idref="ref6" type="bt">8</bibl> <bibtext> Mitchell, D. T., Rebelein, R. P., Schneider, P. H., Simpson, N. B., & Fisher, E. (2009). A classroom experiment on exchange rate determination with purchasing power parity. The Journal of Economic Education, 40 (2), 150 – 165. doi: 10.3200/JECE.40.2.150-165</bibtext> </blist> </ref> <aug> <p>By Mark Scanlan</p> <p>Reported by Author</p> </aug>
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  Data: <searchLink fieldCode="DE" term="%22Undergraduate+Students%22">Undergraduate Students</searchLink><br /><searchLink fieldCode="DE" term="%22Economics+Education%22">Economics Education</searchLink><br /><searchLink fieldCode="DE" term="%22Class+Activities%22">Class Activities</searchLink><br /><searchLink fieldCode="DE" term="%22Educational+Experiments%22">Educational Experiments</searchLink><br /><searchLink fieldCode="DE" term="%22Macroeconomics%22">Macroeconomics</searchLink><br /><searchLink fieldCode="DE" term="%22Instructional+Design%22">Instructional Design</searchLink><br /><searchLink fieldCode="DE" term="%22Risk%22">Risk</searchLink><br /><searchLink fieldCode="DE" term="%22Investment%22">Investment</searchLink><br /><searchLink fieldCode="DE" term="%22International+Trade%22">International Trade</searchLink><br /><searchLink fieldCode="DE" term="%22Educational+Games%22">Educational Games</searchLink><br /><searchLink fieldCode="DE" term="%22Monetary+Systems%22">Monetary Systems</searchLink><br /><searchLink fieldCode="DE" term="%22Group+Activities%22">Group Activities</searchLink>
– Name: DOI
  Label: DOI
  Group: ID
  Data: 10.1080/08832323.2021.1895044
– Name: ISSN
  Label: ISSN
  Group: ISSN
  Data: 0883-2323
– Name: Abstract
  Label: Abstract
  Group: Ab
  Data: This paper provides details on a classroom experiment that focuses on returns to foreign assets given uncertain future exchange rates. Students are assigned the role of foreign analysts and decide how much to invest abroad given their expectations about future exchange rates. The experiment allows students to practice calculating the returns to foreign investments, understand the benefits to skill in predicting future exchange rates, and observe the limitations to that skill. The experiment is ideal for undergraduate students in macroeconomics or international economics courses in a classroom that would allow students to separate into distinct groups.
– Name: AbstractInfo
  Label: Abstractor
  Group: Ab
  Data: As Provided
– Name: DateEntry
  Label: Entry Date
  Group: Date
  Data: 2022
– Name: AN
  Label: Accession Number
  Group: ID
  Data: EJ1328327
PLink https://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=eric&AN=EJ1328327
RecordInfo BibRecord:
  BibEntity:
    Identifiers:
      – Type: doi
        Value: 10.1080/08832323.2021.1895044
    Languages:
      – Text: English
    PhysicalDescription:
      Pagination:
        PageCount: 6
        StartPage: 133
    Subjects:
      – SubjectFull: Undergraduate Students
        Type: general
      – SubjectFull: Economics Education
        Type: general
      – SubjectFull: Class Activities
        Type: general
      – SubjectFull: Educational Experiments
        Type: general
      – SubjectFull: Macroeconomics
        Type: general
      – SubjectFull: Instructional Design
        Type: general
      – SubjectFull: Risk
        Type: general
      – SubjectFull: Investment
        Type: general
      – SubjectFull: International Trade
        Type: general
      – SubjectFull: Educational Games
        Type: general
      – SubjectFull: Monetary Systems
        Type: general
      – SubjectFull: Group Activities
        Type: general
    Titles:
      – TitleFull: Foreign Asset Returns under Exchange Rate Uncertainty: A Classroom Experiment
        Type: main
  BibRelationships:
    HasContributorRelationships:
      – PersonEntity:
          Name:
            NameFull: Scanlan, Mark
    IsPartOfRelationships:
      – BibEntity:
          Dates:
            – D: 01
              M: 01
              Type: published
              Y: 2022
          Identifiers:
            – Type: issn-print
              Value: 0883-2323
          Numbering:
            – Type: volume
              Value: 97
            – Type: issue
              Value: 2
          Titles:
            – TitleFull: Journal of Education for Business
              Type: main
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