1.How can the asset approach explain deviations from PPP based on current price indexes? 2. What are the principal differences and similarities between the monetary and portfolio-balance approaches to...

1.How can the asset approach explain deviations from PPP based on current price indexes? 2. What are the principal differences and similarities between the monetary and portfolio-balance approaches to exchange rates? 3. What is the crucial assumption required for exchange-rate overshooting in the Dorn busch model? Do you think this assumption is valid?