Question

How do the predictions of the asset approach differ from the predictions of purchasing power parity of interest rates increasing in order to keep inflation rates down in the long run.

Answer 1

The assest approach is the one among the other three approches like the market and income approach.It is verfied with the value of the assets both tangible and intangible.This asset approach is often utilised when a company is no longer operating as a going concern and is preparinf for liquidation.The purchasing power parity is nothing but the exchange rate between two currencies is equal to the ratio of the currencies.With the aspect to asset approach the prediction can be made about how the market will react to current events and to understand how important these events are to investors.With the aspect realting to the purchasing power parity it is just that the identical goods in different countries should have identical prices.