A Fractal Portfolio Model of the RMB Exchange Rate

Most classical economic theories are building on the hypothesis of effective market hypothesis that has many conflicts with realistic economy. With the economic development, the effective market hypothesis is outmoded. In this case, the fractal market hypothesis came out. This paper combined the fractal financial market theory with the portfolio exchange theory, originally proposed a fractal portfolio model. This model had the advances of both macro analysis and microanalysis. It is a latest exchange equilibrium model. Took the RMB exchange as an example, this paper empirically analyzed the equilibrium level of the RMB exchange rate. Moreover, inducted a classical portfolio balance model as a benchmarking, this fractal model is coincide with the benchmarking model. Consulting the equilibrium conclusions, this paper made some corresponding suggestions to keep the RMB exchange even and robust.