What my Professor said : You will test if the IFE model holds based on the regression results, so it’s not optional. Beside
What my Professor said : You will test if the IFE model holds based on the regression results, so it's not optional. Besides, without the a and b estimates from the regression, you cannot really forecast the exchange rate using the IFE model, so you need the IFE regression to be estimated.Just add a new table, with the estimated a and b coefficients from the IFE model, their corresponding p-values and the Rsquare of the regression. Then, test if a =0 and b=1 and see if the IFE model holds or not. Then, use the estimated a and b values from the regression and the expected interest rates you get from tradingeconomics.com to forecast the exchange rate.
please note the above suggestion: I need it within 7 hours.
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