
Country’s currency). It is not difficult for the model to generate reports that trans-
late the results of projections in the Host Country’s currency to the relevant for-
eign currency, thus maintaining the accuracy of the calculations, but presenting
the results in a more convenient form.
There are two approaches to projecting exchange rates between currencies,
similar to those for projecting interest rates: either (a) specific assumptions can
be made as to the future exchange rates, or (b) purchasing power parity rates can
be used. The latter calculation takes the difference in projected inflation rates be-
tween the two currencies and adjusts the exchange ...