Essays on Exchange Rate

In the 2000s, Argentina’s financial system fell into a serious recession. For this reason, the leaders in Argentina took financial loans from International Monetary Funds (IMF) and other agencies. However, the country was not able to pay its debt installments on time due to which Argentina failed to pay around US$93.2 billion of its external debt. In the year 2001, the country defaulted on a total of around $81 billion in bonds. The issues faced by the financial system of Argentina made the trading sector suffer as well. The foreign investment fled from Argentina and multinational companies ...

Currency has been a medium of exchange from the existence of humanity and the Central bank was created for the sole initiative of ensuring reasonable currency exchange in different jurisdiction. Therefore, the thesis of this paper will be to look into the historical price movement and any central bank policy that has been put onto the British pound.

Price movement of sterling pound

First and foremost, it is worth noting that the British Sterling pound, is the fourth most traded form of currency after the US dollar, Euros and the Japanese yen. The price movement of the sterling pound is adversely affected by external ...

References 6

The Relationship between Interest Rates and Exchange Rates in Australia 1.0 Introduction In macroeconomics, large scale market-wide factors are considered. Commonly, macroeconomic factors are considered in order to support decision-making, particularly for firms seeking to perform international business (Goodwin, Nelson, Harris, Torras & Roach, 2013). Two of the most important rates influencing decisions of international finance are the interest rate and the exchange rate (Terra, 2015). The interest rate is the percent cost to rent money, and the exchange rate is the value of one form of currency against another. Firms examining options with regard to how to invest money ...

Abstract

When an organization has cash inflows and outflows of foreign nature, the cash forecast for every currency will help during the identification of the currency exposures. The format of the estimation should allow the users to determine the balance for every currency and whether there is a growing shortage or extra money over time based on reasonable cash flows. The increasing gaps between the cash inflows and outflows may need hedging, and the cash flows that offset over time represents the issue of timing effectively. The management of foreign exchange transaction can be achieved through the offsetting transactions to ...

Introduction

Exports can be seen as a mechanism for economic growth of a country. Increased exportation of products can provide output growth directly as part of aggregate output. An increase of foreign demand of products can result in a country’s growth through employment and additional income for exporters. Another significant contribution of exports is that it can impact economic growth by way of “efficient resource allocation,” including more economies of scale and technological change as a result of “foreign market competition” (Helpman & Krugman, 198; Ben-David & Loewy, 1998 as cited in Awokuse, 2008, p. 593). One of the drivers for ...

1 The assessment of financial performance of the division managers in each subsidiary can be obtained by taking a difference between budgeted profits and actual profits in US dollars. It can be understood from the table provided below. The table provided above summarizes the information regarding the actual and budget performance of each subsidiary in 2004 . All amounts are expressed in US dollars that are helpful in comparison among them. It can be seen from Table 1 that the subsidiary of Japan has performed below budgeted profits that in dollars but it might have increased its profits as compared ...

Introduction

The Petrochemical industry in the ministry of energy has been focusing on the oil prices change and how it influences the economy. The oil demand comes from the petrochemical industry whereby energy generation helps in manufacturing and production industries. These industries help in economic transformation through improving country’s GDP. As the source of energy, oil in the petrochemical industry has been influenced by inflation and unemployment, interest rates and exchange rate. These factors influence the government spending, hence affecting the importation of oil from the producing countries such as Saudi Arabia. The oil prices as a result of ...

CONCLUSION

5. Conclusion The research was conducted complying with a predefined set of tools, techniques, and methods. It was accomplished without exceeding the limit of time and other resource allocated for this purpose. This chapter sets out to throw light as to what degree the study has succeeded in meeting research objectives and how it can be applied to managerial level. It is followed by detailed identifications of future prospects of research based on the current study. Finally, the researcher draws attention to some of the drawbacks of the research project along with an assessment of their impact on overall ...

ANALYSIS AND FINDINGS

3. Analysis and Findings 3.1. Introduction 3.2. Analytical Tool – Regression Multiple regressions are performed to assess the relationship of single independent variable i.e. crude oil prices (on Brent benchmarking) with all four dependent variables including Indian GDP growth, Indian Balance of Payments, Exchange rate between INR and USD, and the inflation rate in India. 3.3. Measures for Independent Variable – Crude Oil Price Crude oil is the most commonly traded commodity in the international market. Crude oil price stands independent variable in the underlying study, and same is considered for this purpose of analysis. The Periodic time frame for change ...

According to CIA World Factbook, the GDP of France in terms of “official exchange rate” (The World, 2016) in 2015 was “$2.422 trillion” (The World, 2016). In terms of GDP per capita (PPP), in 2015 it was “$41,200” (The World, 2016) .For comparison with past year results, in 2014 GDP per capita in France was “$40,900” (The World, 2016) and in 2013 it was “$41,000” (The World, 2016). Looking at these numbers, it is seen that GDP per capita is quite stable in France. In regards to the United States GDP in terms of “official exchange ...

INTRODUCTION

Many countries are faced with unemployment and its subsequent effects on its economy. When the rates of unemployment become high, the governments are pushed to shoulder the cost of many social services since their citizens are incapable of paying for them. More importantly, a high unemployment rate due the lowered demands and high interest can influence the exchange rate. The exchange rate is among the determinants of a country’s economic stability and influences the country’s trade with the global market. As such, unemployment should be lowered through fiscal and monetary policies that can stabilize a lower exchange ...

Introduction

Brazil is one of the fascinating developing economies, which economic and social progress over the period of 2003-2014 lifted over 29 million people from extreme poverty. Based on the World Bank (2015) statistics, the inequality rate in the country fell by 11% with the income level of the poorest 40% of the population rose by as much as 7.1% over the same period. At the same time, global financial crisis and political instability in the country over the past few years have had its negative impact on the economy as a whole, reflecting stagnation in inequality reduction and deterioration ...

Long-term influence of monetary policy

Monetary policy can either be contractionary or expansionary, and both policies impact nominal variables differently in the long-run. Price levels A contractionary policy results in a decrease in equity prices because the income stream is discounted at a relatively higher rate. Also, the price levels of equity can drop since high-interest rates and low supply of money lead to reduced demand for equity. In this case, bonds can be an attractive investment since they pay high interests (Meltzer, 1995). Nevertheless, an increase in interest rates does not always result in fall of share prices. People may interpret the high-interest ...

The journey towards the European Union (EU) integration has experienced several turnings. This section of the essay will detail some of the core turning points in the EU integration. Establishment of a Common Agricultural Policy (CAP) was a major turning point in EU integration. The Treaty of Rome defined the specific objectives of the CAP. The CAP was introduced in 1962 (Folmern.p). The establishment of the CAP was enshrined to the state of food shortages after World War II. The aim of the CAP was to build a common European Community market and to cut off tariffs on agricultural ...

1. Introduction This section defines a systematic approach using tools and techniques of research to carry out a research project (Jha, 2008; Kothari, 2004; Newman & Benz, 1998). 2. Research Approach The research aims to base the underlying study on quantitative approach for data collection. Quantitative methods will be utilized for the collection of theoretical data? A statistical analysis (linear regression analysis) will be conducted to achieve this purpose with the help of the secondary quantitative data relating to chosen economic indicators in India. Past studies can also have some numeric information and inference as well. This way, the study ...

Based on the above discussion, recommend and justify the risk exposures that should be reported as part of an Enterprise Risk Management System for the Toyota Motor Company? (10 Marks) The first risk that Toyota is faced with is the investment in commodities. Commodities such as non-ferrous metals, precious metals, ferrous alloys, energy, and plastic resin from outside sources may be subjected to price changes. Changes in prices can have a negative impact on the productivity for Toyota because inflated prices may result in delayed projects and the inability to complete planned products based on a lack of resources. ...

Report for McDonalds

Italy and Russia

Figure 1: GDP per Capita at Constant Prices Figure 2: GDP Growth (Annual %) Figure 3: Inflation Rate CPI Figure 4: Unemployment Rates Figure 5: Policy Interest Rate (%) Figure 6: Russia Interest Rate (%) Figure 7: Current Account Balance in Italy (% of GDP) Figure 8: Current Account Balance in Russia (% of GDP) Figure 9: Russia Interest Rate

List of Tables

BUSINESS OVERVIEW McDonald’s Corporation is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries across 36,538 outlets. Founded in 1955 by Ray Kroc in Des Plaines, Illinois, 80% of the ...

Executive Summary

This section looks into the inception of Disney Store in South Korea, which is the country of interest. Disney Store is a retail outlet that specializes in sales of merchandise that are unique to Disney. Disney Store traces its roots back in 1987, in Glendale, California. A country analysis of South Korea was done with detailed information being noted as far as population, GDP, per capita income, aesthetics, political system, legal system and the living conditions in the country just to name a few of the areas tackled. This was followed by an economic analysis of South Korea where ...

Impact of dollarization in Ecuador, El Salvador, Panama, and Argentina

Introduction In the middle of the 90’s, different countries faced the financial crises. Some of these crises were severe and of vital importance. These crises majorly include “Tequila crisis”, East Asian crisis, the Brazilian crisis and the Mexican crisis and these hit the whole world leaving a devastating impact on the emerging markets of the world. These crises not only had an adverse effects on the related countries by which these are associated, but they also had affected the growing economy of the other countries. The emerging economies have suffered a serious setback as a result of the ...

What is a cartel? (5 marks)

The companies in a market might collude to set the prices by making explicit or implicit agreements between them on the market price, sharing the market geographically, or controlling the quantity supplied in the market. The agreement between the companies in a specific market might create an oligopoly behaving like a monopoly. The companies might set the price, and all the agreement partners might obey the agreement. If the companies can create a large market power, they might behave like one monopolist. Cartel is the situation of existence of an explicit or implicit agreement between the companies in a ...

McDonalds has come to create a network in both Italy and Russia. Italy seems to have better balance of payment and government balance indices, interest rate, trade policy instruments and not needing to lose over currency rates while dealing with Eurozone importers, and even unemployment and GDP growth rates. However, unemployment and the lack of growth indicating poor economic performance and social welfare situation may advantage the brand in Russia through better low-cost labor availability and consumer reorientation on less expensive restaurant offerings. Overall, neither of the country is the ideal market for the brand, yet both have their ...

1.0. Introduction Every business is exposed to small and big risks in its internal and external business environment and risk management strategies are directed to eliminate, avoid, or manage these risks. An effective mechanism for risk management ensures the long term survival, growth, and profitability of an organization. The importance of risk management is peaking in the modern business climate that is much more characterized by uncertainties and risks than its classical form. Financial institutions, as well as all other types of organizations, are also faced with certain threats within their business life, and several of them, if not ...

Essay one (China’s financial system)

Introduction and Thesis Statement The restoration of an economy from a depression requires a careful adoption of strategies. Various measures that governments use to promote the growth of key sectors as wells the entire economy have severe outcomes which must be considered before they are put in practice. Fundamentally, governments implement different fiscal and monetary strategies to solve economic problems, which may be successful or not. Thus, the analysis of the strategy to be deployed becomes essential to achieve the desired objectives. The financial sector in an economy is of central importance. As such, public policies that impact on ...

Introduction

A global supply chain is composed of processes, interrelated entities, and resources that make and deliver products and services to customers across many countries (Drake, 2012). Due to globalization and increase in international trade, companies are operating and sourcing products and services in many countries. There has been a rise in multinational companies with plants or stores in different countries. This underscores the need for global supply chains to enhance the operations of these companies. Some companies use global supply chains to source for products.

Benefits of global supply chains

Global supply chains enable a company to compete all over the world. A company ...

Introduction

Our countries are globally connected and the change in one country affects the other. The stock and the bond market form an integral part of the country' wealth and development. Though there are benefits in investing in international market but there are also high risk in these transactions. To have better idea whether to invest in international market or not we will discuss about the advantages and disadvantages of investing in the international market.

Advantages of Investing in International Market

When a country invests in the international market it increases  the holding of foreign stocks other than domestic ones. The portfolio becomes more diverse and ...

International Risk Management

Introduction Despite majority of the participants in global business arena associate German economy with efficiency and high quality, yet if the U.S. companies consider operating in this particular marketplace, they must be well-informed of different business risks. Therefore, this research paper is aimed at highlighted different business and operational risks which a U.S. based company might face while operating in Germany.

Exchange Rate Risk The very first risk that the U.S. based company has to face in Germany pertains to the fluctuations in foreign exchange rate against the domestic currency. In case, the U.S. dollar appreciates against Euro, the ...

Introduction

The main objective of entrepreneurs is to achieve profitability and growth of their ventures. Most of the entrepreneurs who have saturated their domestic markets seek to globalize their operations to increase profitability and achieve growth (Vinturella & Erickson, 2013). Globalization of business operations involves various considerations to facilitate the assessment of the viability of business expansion. Primarily, organizations seeking to go international must consider their financial capabilities and the risks involved (Vinturella & Erickson, 2013). Entrepreneurs can expand their businesses by increasing production and exportation or establishment of operating plants in different countries. This paper will answer various questions regarding the ...

The different regions across the globe exhibit a great level of distinction in factors of production for which there is a huge difference in the costs of production within these regions, hence, the difference in economic growth and development across these regions. The understanding of the economic, spatial change is linked to the overall processes of transformation of capitalist markets and institutions, and productions systems due to the recognition of the contribution of various locations of economic activity. The regional economic performance has been pegged on a number of factors across the economy. First, is the use of knowledge ...

Report of Hudson’s Bay Company

A #:

Introduction

Founded in 1670 in Canada, Hudson Bay Company (HBC) is the oldest firm in North America, operating in the retail segment across Canada, United States, Germany or Belgium (HBC official website, n.d.). With a long tradition in the fur market, the company adapted to socio-dynamic changes that marked clients’ loss of interest in fur, and adjusted to more modern requests, entering the general retailing business, currently operating in luxury fashion, after acquiring brands such as SAKS Fifth Avenue, Lord & Taylor, but also owning department store (GAMERIA Kaufhof, Galeria INNO, Sportarena), off-price stores (Designer Depot) or furniture, appliances ...

China

1. COUNTRY

We have chosen China as a country for analysis

2. RECOMMENDATION We have decided to convert US dollar to Chinese yuan on May 24, 2016. The total cost in dollars according to this option is calculated further in question 9. 3. CHINESE ECONOMY OVERVIEW China’s role in the international arena has been growing in the recent years. Apart from being the most populous country with over 1.3 billion people and one of the largest countries in the world by territory, it has been experiencing substantial economic development in the past decades (Naughton 3). China is the second largest economy in the world after the USA. ...

The Big Mac Index

I would like to analyze The Big Mac Index in European region. I chose 5 currencies: Euro, Sterling, Swiss franc, Zloty and Kroner. Let us have a look on Big Mac prices in each of the country from 2012 to 2016.

Euro area

As it can be seen from this table, raw index was always undervalued – the Bic Mac price in euro was lower than in dollar. It means that the euro currency is overvalued against the dollar. Moreover, we may conclude that the euro is not a very stable currency because the price for Bic Mac changes every year. In ...

In order to define ‘economic development’, I have looked into the literature on the subject to subsidize my answer. I have looked particularly into the works of Acemoglu, Laibson, & List (2016) and Rahnama-Moghadam, Samavati, & Dilts (1995). Acemoglu, Laibson, & List (2016, p. 205) indicate that the term less developed country (LDC) fosters images of backwardness, poverty, and lower levels of technological sophistication. They claim there is some truth in these images but, nonetheless, there is a broad range of countries that are correctly described as being less developed. One country has not reached the known levels of financial well-being that ...

The welfare of a country and its position among other world nations is hugely determined by its economic policy. Saudi Arabia is one such country with a consistent and stable economy and is one of the most important international players. It is the largest oil exporter among the OPEC countries, its de facto leader, an influential player among the GCC countries and the most important partner of the USA in dealing with Middle East issues. In this essay, the economic policies and exchange rate policies of Saudi Arabia are discussed in detail. Also the foreign investments and operations of ...

Introduction to Financial markets

The financial market is a term that is used to describe any marketplace where both buyers and sellers participate in asset trading like bonds, equities, derivatives, and currencies. Therefore, it is typically defined by possessing transparency pricing, regulations on trading, and market forces that determine the value of securities that are in the trade. Financial markets are almost found in every country. However, some may be small with few participants while others like the New York Stock Exchange are big and do trade trillions of dollars on a daily basis. Moreover, the investors have the access to a large ...

Abstract

This study examined the effects of a fixed currency exchange system on China’s economy as well as global growth. The study analyzed the different economic indicators of China and their relation to the fixed currency system. We predicted that this system had an effect on various sectors of the economy and resulted in economic growth which is consistent with recent research on the benefits of a fixed system to the economy. The system has made goods from China cheap hence increased its exports and strengthened its manufacturing industry which has had a positive effect on global economic growth. ...

International FinanceName of the StudentCourseProfessorUniversityDate

International Finance INTRODUCTION

British Airways is one of the leading airlines in the United Kingdom primarily dealing with vacations and flights internationally. They have several subsidiaries and have increased their fleet to 262 planes. British Airways now has flights to 169 destinations.

Company B: Volkswagen

Volkswagen, Europe’s leading carmaker and one of the most successful global companies, reported a 95 drop in 2003 fourth quarter profits which collapsed from €1.05 billion to a plain €50 million. For all of 2003, Volkswagen’s operating profit fell by 50 percent from the record levels attained in 2002. Although the profit crash had more ...

SWOT analysis of MIWA International Corporation

Part 1- Description Miwa International Corporation is founded in Japan as an international company working in the wholesale sector of the market. The company now is successful in occupying a Unique Position in Market, which is achieved with the help of its special product line include cosmetics, skin care products, and product health care. No other company or brand is offering the same special line in the market. However, the brands do exist within each product category. The most of its consumers for the company are Asians because they are more concerned about white complexion, and Miwa offers a ...

INDICATORS:

Income level: High Income Population: 35.54 million (“Data” 2014) GDP at market prices (Current US$): $1.785 trillion (“Data” 2014).

GDP per capita (current US$):

$50,230.8 (“Data” 2014). GDP growth (annual %): 2.44 (“Data” 2014). FDI Inflows: $59.6 billion in 2014 (“Trade Policy Review” 5). FDI Outflows: $58.2 billion in 2014 (“Trade Policy Review” 5).

Balance of Payment:

Current account balance (BoP, current US $): (-) $ 37.47 billion (“Data” 2014). Current account balance (% of GDP): (-)2.1% (“Data” 2014). Import of goods and services (BoP, current US$) : $580.7 billion (“Data” 2014). Exports of goods and services (BoP, current US$) : $564.6 billion (“Data” 2014). ...

According to IMF (2016), the Special Drawing Rights (SDR) is an international reserve asset created in 1969 by the IMF. Its aim was to supplement member nation’s official reserves. In the beginning, the SDR operated in the context of the Bretton Woods fixed exchange rate system. In this regards, countries that participated in the system needed to hold their national reserve either by the central bank or government in the form of gold or any other broadly acceptable foreign currency. The currency or gold was used to purchase the country's domestic currency in the foreign exchange market to ...

PERSONAL FINANCE INVESTMENT IN QATAR: INVESTING QR 1000000

Abstract This article describes a personal finance project which entails the investment of QR 1000000 in a short time frame, from 1 March to 27 May 2016. We first define personal finance and establish the five steps of a personal financial planning process, which entails: (1) assessment of the individual’s financial situation; (2) determination of the individual’s financial goals; (3) creation and details of the financial plan, based upon the determined goals; (4) execution of the aforementioned plan; (5) monitoring and reassessment of the plan. For each one of the five stages, we carry out the required ...

Question 1.

The European Integration has undergone several changes to be what it is now. Several incidents and treaties marked the turning points for the EU in its infancy years to create a more stable and unified European cooperation. The Marshall Plan formed in 1948 consolidated democracy in Europe after the German defeat in the WW2 (Dinan 1122). The United States proposed the plan to speed up economic development in the transatlantic region. The plan saw the creation of the OEEC (Organization for European Economic Cooperation) liberalize trade and the Coal and Steel Community to oversee the extraction of coal in ...

Currency Hedge

Over the few decades, the financial markets have seen explosion in the derivative markets. Even though notable investors such as Warren Buffet has called derivatives as the weapon of Mass Destruction’’, still, derivatives accounts for a market worth trillions of dollars as companies around the world use these instruments to hedge their risk exposures. Below we have discussed three traditional derivative instruments and how they are used by the companies to hedge their foreign exchange exposure:

Currency Forwards:

Currency Forwards are the derivative contracts as part of which, one party agrees to buy a predetermined amount of one currency for a ...

Definition of Binary Options

An option is a derivative contract where an investor possesses rights to purchase and sell assets such as commodities, foreign currencies, and common shares etc . There are two types of options like traditional, regular or vanilla options as well as binary or digital options. The market dynamics and mechanics for options contracts are same in every economy. The only difference relies in the manner in which options trading is regulated in each country. In derivatives, binary option represents a trading form where traders or investors predict movement in the prices of underlying assets, commodities and securities etc. The word “ ...

International finance

Question 1: Uses of the balance of payment data It is used in the recording of economic transactions of the residents of a particular country to the rest of the world within a given period. Current account shows the total net amount a particular country is earning if it’s in excess or spending when in shortage. It’s calculated by net income from exports fewer payments from the imports. While the capital account; deals with the recording of the ownership of the foreign assets. It involves the reserve account and loans and investments a country and the rest ...

Introduction

The exchange rate is a very significant economic variable that all markets keep a close watch. Exchange rates are influenced by multiple factors both political and economic. A variation in exchange rates implies that the reference currency has become weaker or stronger against the underlying currency. The Japanese Yen has experienced numerous stability swings against other currencies over the past here decades. The worst point in the era experienced by the Yen was in the early 1980’s when the Yen weakened to trade at as low as between 200 – 270 yens per dollar. This condition persisted until after ...

Executive Travel Report

Tel Aviv Tel Aviv (Israel) Fast Facts Status Financial center of Israel and 2nd most populous city Time zone UCT/GMT +3 hours

Political system Democracy

Main religion Judaism Language(s) Hebrew, Arabic, English Currency exchange rate 1 ILS = 0.26 USD; Inverse 3.76 USD

Arriving to Ben-Gurion International Airport (Tel Aviv)

The airport is located 20 km (12.5 miles) outside the city. Equipped with 3 terminals, the airport is designed to service approximately 16 million travelers a year. You will arrive to Terminal 3 that accepts international flights. Inside the terminal you will find an emergency clinic, post office, currency exchange centers, 24 hour banks and a number and of ...

Introduction

The exchange rate has become an integral component of modern economics. Its role stems from its far-reaching effects on the economy of a country, investments, the profitability of firms, and personal finances. Countries have become even more interdependent due to the rapid advancement in communication technologies and the expansion of global trade, which have significantly reduced the geographical distance between both individuals and countries. However, since nations use a broad range of domestic currencies with different values, trading partners must, therefore, rely on currency conversion methods to facilitate global transactions. This paper explores the importance of exchange rate and ...

GAS 14 requires a firm to translate all transactions involving foreign currency into the its functional currency. The standard provides that the functional currency should be identified considering the general economic condition (Drsc.de). Transactions are initially recorded at the spot exchange rate on the date of the transaction. After which, monetary items are translated using the exchange rate on the date of preparing the statements (closing rate). Non-monetary items are translated using the rates used on acquisition. Any losses or gains on translation are recognised in the income statement as profit or loss (Drsc.de). The financial statements of subsidiaries ...

Pertaining to the scenario in which the Thai government decided to peg their currency (the Thai Baht) to the U.S. dollar, Thailand could possibly experience inflation due to the artificial valuation of their currency to a more established currency, (Moreno, R., 2000). That being said, the United States would not experience inflation as a result of this agreement. In fact, the United States would benefit because the Thai government would have to invest in the United States stock market and the Thai stock market, which would invariably help the United States economy, (Moreno, M., 2000). Relating to import/exports and ...

(A case for a parent firm in a net oil exporting country with subsidiaries in a net importing country that has free market economy, politically stable, positive currency speculation and possibility of government defaulting on its debt)

Oil Prices and Exchange Rate

Oil price dynamics have a bearing on the ability of multinational to precisely model the future exchange rates. In most instances, in order to manage the foreign exchange rate risk that the firm is exposed in the international business arena, most multinational will hedge against the risks that are associated with exchange rate fluctuations. As a result, these multinationals minimize the possible ...

Abstract

Developed countries have long agreed that there is a necessity to assist developing countries if the world is to develop continuously without issues. These developing countries have the capacity to compete against developed countries if they are given enough support and education on how they can bolster their development. Today, two regions are currently succeeding in breaking the expectations of the international community and they are East Asia and Latin America. Since the end of the Second World War, countries for both regions launched extensive economic reforms that enabled prosperity to persist in the region. Considering this change within ...

The problem of the exchange rate differences between different currencies is the special issue to be defined in the process of estimation of the company real value. The interrelation dollar-sterling equals approximately 1.5 % as for the 1983 year. This correlation means that the pound sterling is devaluated currency comparing to dollar. The worth of the pound sterling is higher than that of the dollar. It is well-known fact that the stronger is the currency the more profitable are the investments made in this currency. From this only statement and the dollar/pound correlation we may make the conclusion that the ...

Introduction

The pricing strategy of a commodity is one of the crucial aspects of the marketing mix for an international organization. Pricing is the only marketing mix element that generates revenue for a company. An organization’s pricing model is fundamental to its expansion strategies in the international market (Theodosiou & Constantine, p.2). This essay examines factors that affect global pricing strategy of a product by a firm.

Factors affecting global pricing

With the example of iPad Air 2, different markets around the world have different prices for the model. The iPad Air (16 GB) model retails at $ 499 in the US market. However, price ...

BUSINESS IN EMERGING MARKETS

Introduction The theory of natural resource curse can be founded back from the 1970s. Resource curse has been an important topic for researchers since two subsequent decades; multiple research efforts have proposed the association between the production of resources, numerous socio-political ills, and, economic underperformance. The role of natural resources in the growth of the economy has been a question of immense debate. If the role of natural resources is considered in common sense, then economic growth theories propose that natural resources are the gift and economies through building their capital can grow economies. However, if the revenue spending ...

Gupta and Goldfajin defined a tight monetary as “a case in which real interest rates in the aftermath of the crises are higher than the average real interest rate during the 24 months preceding the crises”(Goldfajn and Gupta, 1999, p.4). The primary objective of ensuring that the monetary policy is tightened is to make sure that the supply of money in the economy is reduced and also to ensure a conducive environment for businesses. For a commercial bank to lend money, there are a lot of factors that it considers. Some of the factors include the volume of ...

Risk Management at Old Mutual Group

Old Mutual risk management strategies are shaped by the potential impacts on the company's reputation, earnings, liquidity and future sustainability. They are strategic, and the companies closely monitor them. Owing to various strategic changes that the company underwent in the period under review, strategic execution risk is the principal risk facing Old Mutual. The company is faced with other principal risks including, economic situations in the country of operation, shifting credit risk across the group and currency devaluations. There are also other inherent potential risks owing to the changing customer needs, market exposures, liability insurance risks, and interest volatility. ...

BUSINESS FINANCING

Introduction Business owners and managers seeking financing encounters an essential decision regarding choice of whether to borrow money or to make use new equity capital. Given that equity and debts have very varied characteristics, each of them has different effect on cash-flow, earnings, and taxes as well as on balance sheet. They also have different impacts on any company`s dilution, leverage as well as a host for other financial metrics by which companies are measured. Lastly, each business financing options presents a different kind of relationship in relation to the financing source. Thus, a company`s plan on ...

Inflation and Employment

Inflation and Employment The world’s economy is in a constant growth and countries are doing their best to keep up with it. New technologies, green energy sources, and cheap labor help propel an economy in the right direction. However, it has its disadvantages towards the citizens; most are simple while others are quite severe. Inflation and employment move hand in hand with each entity affecting the other. The higher the inflation, the higher the rate of unemployment. Struggling countries are trying their level best to keep up with the economic changes by creating substantial jobs for its citizens. ...

Introduction

Monetary policy and fiscal policies are important aspects of the analysis of the U.S economy, as they have a significant impact on the growth of the economy. Moreover, the two types of policy issues are always in active use in the country although the media offers much attention on various economic indicators. Nonetheless, both monetary and fiscal policies have a significant role in the development of an economy and must work together as they cannot exclusively work on their own. Fiscal policy works using tax and spending changes to impact on an economy in diverse ways. However, for any ...

Q: Determine the annual effective financing percentage cost of the yen-denominated notes issued in each of the three scenarios in the Blades case for the future value of the yen.

Scenario 1: No change in value of yen Scenario 2: 2% appreciation in the value of yen relative to Baht Scenario 3: 3% appreciation in the value of yen relative to Baht Q: Determine the probability that the financing cost of issuing yen-denominated notes is higher than the cost of issuing baht-denominated notes As we may note from the above spreadsheet table, under all the three scenarios, the annual ...