Currency College Essays Samples For Students

Summary of “What Makes a Great City Great” by H. V. Savitch
In “What Makes a Great City Great,” H. V. Savitch argues that city greatness could be assessed by reference to four distinctive sets of criteria. By examining four major American cities (New York, Los Angeles, San Francisco and Chicago) in terms of currency, cosmopolitanism, concentration and charisma (the 4Cs), he claims that it is the cumulative impact of those attributes that renders a city great. His paper is designed as a response to the ambiguity created by previous scholarly articles on the matter and aims to provide a critical examination of ...

The existence of different exchange rates allows using different approaches and methods when converting currencies. One of these methods is the current rate method, which is very actively used throughout the world. This method converts revenues and expenses into US dollars using the exchange rate so that any article of their accounting will be recognized during the period. In practice, an average exchange rate is used for this period. Revenues and expenses are converted at the exchange rates prevailing at the balance sheet data. Accounts for the movement of capital used the exchange rate of the period when the ...

The killing of President John F. Kennedy was a blatant murder, not a random assassination executed by a man by the name of Lee Harvey Oswald. His death was carefully planned out, and was a result of the Presidents attitude towards issues surrounding the Federal Reserve, or otherwise known as the FDIC. Also, the Warren Commission, unofficially claims that Lee Harvey Oswald was an ex-military man, with a history of depression and suicide attempts. This of course is the US Governments official response to what happened that day. The Warren Commission claims that he single-handily planned and executed an assassination attempt on President John ...

Question 1

The theory of Purchasing power parity holds up well over the long run. The reason for this is because the prices of commodities are brought on throughout a long period of time. Therefore, when a certain currency inflate so do the prices, however, this may be affected by many different reasons. When the exchange rate is the same between a few select currencies then it can easily be allowed to buy a lot of commodities and bring it to another market whose currency is pegged to another major currency. However, the theory of Purchasing Power Parity tends to not hold up well over ...

The Mexican peso in this case appreciates in relative to the US dollar, is of great benefit to the Mexican production industries. This is because the cost of exports will raise thus increase in profits for the Mexican industries. Mexican products too will be competitive in the international market as the production cost does not exceed the sale value of the product. US investment in Mexico will increase due to certainty of the value the peso and the higher inflation rate of Mexico than that of US. Foreign exchange risk is minimized as investors are able to eliminate all ...

I believe that economic globalization brings both benefits and shortcomings to international portfolio investments, but is overall beneficial. On the one hand, economic globalization leads to expanded markets for companies who are now able to address the need of more customers than before. Because of this, companies can use economies of scale to their own benefits and generate better returns on capital. The globalization allows for a more efficient allocation of resources, for instance by manufacturing products in the area where the prices are the most competitive (e.g. European textile brands manufacturing clothes in Bangladesh). These are all benefits for ...

The foreign currency is usually held country's central banks and other financial institutions. This currency is used to pay the international debt and trade obligation or to influence the domestic exchange rate. In the international trade of the commodities such as the gold and oil are priced and measured in using the reserved currency. This contributes to the holding of the currency by other countries for the exchange of the products.
The holding of such currency reserves helps in the exchange rates risks reduction. The purchase of the product and good is done in the manner that has ...

Every nation has independence to choose, which exchange rate system it will follow. The choice for selecting a suitable exchange rate ranges from a flexible exchange rate or fixed exchange rate system. Under floating exchange rate system, the value of the currency is decided by market forces, while, under fixed exchange rate systems, the currency of the country is pegged against some standard of value. The choice of exchange rate is a tough task and depends significantly on the freedom of capital to flow in and out of the country. However, one negative effect of allowing the free capital flows is that ...

International Trade and Foreign Exchange Rates

International Trade and Foreign Exchange Rates
Trade surplus or deficit is usually used to analyze international trade. Speaking about U.S. economy, one need to use surplus of imports only, as the balance of trade this year in January was minus 38702 million dollars, meaning that the US imports goods more than exports (“United States balance of trade”, 2014).

Firstly, this is industrial machinery and equipment, at $731 billion. Almost a half in the category is crude oil ($313 billion). Also, fuel oil ($46 billion), petroleum products ($50 billion) and natural gas ($9 billion) is essential in it. Large amounts ...

The government of China modified its currency policy on July, 2005 and made an announcement that the government would not interfere with the currency, it is a guarantee that exchange rates would become adjustable based on demand and supply in the market. In 2008, China halted its currency appreciation policy because of decline in global demand for Chinese products. This led to millions of migrant workers lost their jobs and resulted to government intervention preventing any further appreciation against the dollar. In 2004, China’s current account increased its reserves from 469 billion to $421 this is historic because it ...

International Finance

Answer 1)
Vehicle Currency refers to a currency which is used to make international transactions between two countries when either of the countries do not have the vehicle currency as their national currency. For Instance, since most of the trade transactions are help in US Dollars, in such case US Dollar can be referred to Vehicle Currency.

Using a vehicle currency, offers following benefits:

Reduced Transaction Cost: A country whose national currency is used as the vehicle currency offers advantages to its resident as they can conduct international trade and commerce with more convenience and lower transaction cost.
Improved Currency Business: With the use of ...

Cambridge Dictionary defines money as the coins and bills of a certain value used for the financial exchange. Money serves as a medium of economic exchange, a measure of value, and as a mechanism of saving and storing wealth.
Money is accepted in return for goods and services, and it acts as a measure of value in the price system. It is the key mechanism of making payments and serves as a means of storing the purchasing power.
Money is not only coins and bills, but any commodity that is used as an instrument for exchange. Centuries ago people have been using seashells ...

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In today’s world, changing exchange rate has a great impact on the working and reliability of companies. The fluctuating exchange rate affects MNCs, large corporations along with smaller industries. Not only do business owners need to be aware of the impact of exchange rate risk, but also to investors since it can influence their investments. Transaction exposure is due to the international transactions made by a company. Economic exposure is uncalled for currency fluctuations that occur. If the currency increases then the competition between the ...

Cash Conversion Cycle – Home Depot Inc. versus Lowe’s Companies Inc.
In the section, the cash conversion cycle of two companies is compared which reflects the financial performance of these publicly traded businesses to collect cash, generate sales and pay their creditors. In the below mentioned table, the cash conversion cycle is computed by the addition of Days Sales Outstanding (DSO) ratio to Days in Inventory (DI) and exclusion of the Payable Period (PP) ratio from that sum.
It is also clear that liquidity management and cash generation, “Lowe's Companies” tends to outperform “Home Depot” because it ...

Introduction

Foreign exchange market is an international, decentralized market for trading of currencies of different countries (DeRosa, 2011). This market is made up of the financial institutions, especially banks that are ready to exchange one currency for another. DeRosa (2011), explain that exchanging money means trading one currency for another and the value at which exchange takes place is called exchange rate, which is the price of that currency. Most of the transactions take place in United States, United Kingdom, and Japan with most of the rest market located in Germany, Australia, Singapore, and France. Foreign market is fully liberalized ...

Introduction

This paper entails a detailed discussion and summary of what I experienced and learnt through my participation in the Financial Markets course, which formed part of my graduate studies. Having recently joined the financial services sector as a junior analyst at a large investment bank, my participation in this course has enabled me to gain practical and knowledgeable financial insights that I have applied both at work, and in other real life situations. Prior to joining the financial services sector, I previously worked as a litigation attorney in a mid-sized law firm located within my metropolis. My participation in this course has, therefore, equipped ...

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Business

The Bretton Woods system is regarded as the most remarkable achievement in the financial management and exchange rate scenario, as it was after the Bretton woods agreement the US- dollar was set as a standard global currency, eventually putting an end to the gold standard system. Two global organizations were also established after the Bretton Woods agreement. They are the World Bank and the International Monetary Fund (IMF). The primary objective behind establishing these two organizations was to monitor the newly established system. Since the United States was the single nation globally ...

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What is a Bitcoin? Well before one can truly understand what a Bitcoin is, I feel as if they must understand the general concept of cryptocurrency. In brief, cryptocurrency is simply a digital or virtual currency that is protected by cryptography as means of security. This form of currency is notorious for its anonymous nature. There are several dozen kinds of cryptocurrency already in place and being formed too. The most popular version of being called a Bitcoin. Imagine Bitcoin is to cryptocurrency, just as US dollar bills are to paper money, but with a few small changes.
Bitcoin is ...

The European Union covers almost half of Europe. The region comprises of 28 member states who have the common interest of doing business. The region covers between Belarus, Ukraine, Russia, southeastern Europe, and the North Atlantic Ocean. The whole region covers about 3,976,372 square kilometers, which is less than half of the whole area covered by the United States of America. The coastline of the area is about 65,413.8 kilometers. The area experiences cold temperature to the north side, mild winters and hot, dry summers in the south of the region. The terrain of the area ...

Translation risk arises due to variance in exchange rate used in expressing the portfolio components in the books of multinational firms. The higher the portfolio components in the books of the company, the higher the translation risk. Bearing in mind, this kind of risk, several ways have been suggested, and most of them adopted to cushion the multinational against this type of risk. This article will briefly discuss the available ways of cushioning a company against this risk.
This type of risks is mostly felt by companies that operated cross border businesses and particularly where a single currency is accepted ...

Problem 1

In a fixed exchange rate regime (also known as pegged exchange rate), official exchange rate is tied to the exchange rate of another country. In some cases, it can be tied to the prices of gold. Free floating exchange rate changes freely and is determined by the demand and supply of that particular currency relative to other currencies. In the managed floating system, central bank at some frequency often intervenes not to allow the exchange rate getting away to some unexpected level.
The fixed exchange rate system keeps currency value within a narrow range, whereas currency value can be volatile ...

In a monetary union, governments of member countries do not have their control on the currency in which they issue debt; the case is different for a non-member country, because, they are capable of issuing debt in their own currency on which the government has full control. In the article, Paul De Grauwe, has evaluated the economic position of a member (Spain) and non-member (UK) of euro-zone. The state of banking sector of UK is not much healthier than Spain, UK government has their control over their own currency on which they issue debt, whereas Spain is a member of euro-zone, and has ...

Exchange Rates Systems

The financial risk associate with the currency is the risk which is out of the control of the management of any business. The international trade of any country is done normally in the foreign currency. Therefore, in these circumstances, it is the responsibility of the government and the central bank to minimize the risk associated with the main pool of foreign currencies to encourage the international trade of their country. (Pettinger)
As compared to freely floating exchange rate and dirty float exchange rate, the fixed exchange rate of the currencies has the minimum rate of risk and fluctuation ...

Although the origins of the theory date back to the 16th century, Gustav Cassel proposed the modern form of the theory of purchasing power parity in 1918. It is an economic theory used initially just for determination of exchange rates but recently as a measure of comparison among living standards of different nations as well. The concept of ‘Purchasing Power Parity’ is based on the law of one price. It means that the prices in two different countries should be identical when the currencies are converted into a common currency. In other words, the phrase purchasing power parity means equality in ...

Introduction

Bretton woods System is a management monetary rules which were established for both commercial and financial relations among the world’s industrial states. Ideally, this rules focused on rebuilding the international economic system during the Second World War. 730 delegates from 44 associated nations gathered at the Mount Washington Hotel located in Bretton Woods in the United States. During the Bretton Worlds Conference, which occurred between 1st and 22nd July 1944, an agreement was signed (Bordo & Eichengreen 64).
In order to come up with this rules, the delegates came up with the International Monetary Fund and the International Bank ...

In 1991, authors Roth, Prasnikar and Okuno-Fujiwara performed an experiment that seeks to analyze the role of different forces as currency, culture, and language in affecting market behavior in four different countries. Their goal was to establish which of the three variables would have the most significant impact in a bargaining situation. However, for this experiment the proponents presented the use of two experimental conditions or situation. The first situation involves a simple one-period bargaining situation and simple one-period market in three different countries.
The proponents predicted that among the three variables, culture would have the greatest impact in the ...

Answer 1

One of the main reasons that some US firms may become multinationals is that they may enjoy increased global presence and hence high power. The other reason is that they may increase their profits by entering into markets that are not as competitive as the US market. Thirdly these firms may enjoy a less regulated operational environment in other countries. As for why the firms may become multinational, any of the reasons will fit. There is no reason that is irrelevant since all of them are important for US firms.Answer 2
Such a domestic firm is protected from foreign exchange ...

Abstract

This paper is on the topic of currency hedging as part of Global Financing and Exchange Rate Mechanisms. The first section of this paper will discuss the use of Currency Hedging in global financial operations. The following section of this paper will describe the importance of currency hedging in management of risks. The final section of this paper will conclude with the basic understandings of currency hedging and its understandings.

Introduction

Currency hedging is done by entering in a financial contract for protecting expected, unexpected or anticipated change in the currency rates. Businesses and financial investors use Currency Hedging for eliminating ...

Essay Questions

- NAFTA and the EU
NAFTA (North America Free Trade Agreement) was established on January 1st, 1994 between the United States, Mexico and Canada. All quantitative restrictions and duties were eradicated as planned on January 1, 2008. NAFTA established the largest free trade area of the World that currently links 450 million people producing $ 17 trillion worth of products. On the other hand, EU (European Union) was established in the late 1940s after World War II in an attempt to consolidate the countries of Europe. It is an economic and political union between countries which make its own ...

Answer 6(Spot rate and Forward Rate)

The spot rate is defined as the current exchange rate. On the other hand, a forward rate is the rate that is agreed by both the buyers and the sellers to be applied in the future in forward transactions. Currency movements do not affect the forward rate. The main relationship between the forward rate and the spot rate lies in the calculation of the rate. The forward rate is calculated by either adding or subtracting a premium or discount from the spot rate. The premium or discount arises as a result of the discrepancies between the interest rates of the two prime ...

China-US External Imbalances

Current economic surplus of China was in the focus of attention of economic policy discussion as well as academic studies on external imbalances for over a decade. The core of this discussion is the relationships between the growing trade and the country radical exchange rate regime. Modern economic environment in China is often blamed for taking jobs away and slowing down economic growth in its major partner, the United States. The statistics presented in the Appendix 1 reflect the relationships between the level of the U.S. BoP and global economic crises over the past 2 decades.
The reality of ...

Foreign Exchange Market

The foreign exchange market (forex, Fx, or currency market) is a worldwide decentralized market for the exchanging of monetary standards. It includes the procedure of exchanging the currency of one nation for the currency of an alternate. This process is essential for worldwide exchange to happen in a universe of distinctive currencies. The foreign exchange market is the biggest and most seasoned budgetary market on the planet. Dissimilar to the prospects and stock markets, exchanging of currency is not unified on any one exchange, yet exchanged everywhere throughout the world via banks and brokers.
The foreign exchange market is the ...

Business

In the article “Economy in U.S. Grows at 3.6% Rate on Bigger Inventories” taken from Bloomsburg, Victoria Stilwell describes that the the economy of United States is showing positive trends. Gross domestic product i.e., GDP is rising at the rate of 3.6% annually, which is due to greater increase in the inventory. In the third quarter, inventory has increased at pace of about $116.5 billion. Final sales and domestic income have also shown upwards positive trend and have risen 1.9% and 1.4% respectively (Stilwell). Housing and auto sales have also shown remarkable strength. All these factors have enabled the ...

Argumentative essay

Introduction
Following the World War II, the disarray in the financial systems was apparent; Mexico, Russia, and even Europe were all victims of massive financial crisis. Inflated currencies in nations were just, but the start of bigger catastrophes, as armies could not be armored efficiently, schools could not be run as expected and worst of all the nurturing the growing industries became almost impossible. Well, although some individual states were insulated from the calamity that was, Economists warned of the impending disaster, given the close integration and the ever-deepening financial ties.

Brief history

The urge to have a uniform universal system ...

Question 1

International trade is an approach that is used to engage in the international business through imports and exports. A firm can penetrate the market through selling their products abroad and obtaining low cost suppliers. Some of its advantages involve increase wages for the members, counterbalance monopsony, and productivity deals. It disadvantage includes unemployment, ignoring of non-members trade unions and lost productivity.
Another method of engaging in the international business is through licensing where a firm acquires trademarks, patents, copyrights, trade names and royalties. Advantages of licensing are that a company is able to penetrate to the local market with minimum ...

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- The Federal Power to Tax
The federal power to tax is outlined clearly in The Taxing and Spending Clause - Article 1, section 8, clause 1: “The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States” (I.8.i). In essence, in order to pay for needed services and infrastructure provided by the federal government, the ...

ASC 830-230-55-1: Foreign Currency Matters-Statement of Cash Flows- Implementation Guidelines and Illustrations

ASC 830-230-55-1 Provides us illustrative guidance on statement of cash flow of an entity which either have operations in foreign domicile or conduct transactions in foreign currency. Such Entity shall report the reporting currency equivalent of foreign currency cash flows using exchange rates at the time of initiation of concerned cash flow. The entity may use weighted average of exchange rates for translation if the outcome is same as if the rates at the dates of the cash flow were used. For the purpose of reconciliation of change in cash and cash equivalents, entity, in the statement of cash ...

- Plot the collected FX data on a graph showing the daily movements
Figure 1: Daily FX exchange rates for different currencies
The selected currencies are US dollar, UK Pound, and Chinese Yuan. To start with, the US Dollar has shown a tremendous increase within the period of between July 1 2010 and July 1, 2012. As shown in figure 1, the rate was low in July 2010 but increased with a very high rate to June 2012. The AUD and USD exchange rate shows the relationship between toe currencies in respect to daily FX exchange rates. The USD exchange ...

The United States currency is the Dollar (US$) and its strength is measured in three distinct ways – through exchange rates, through treasury notes and through foreign exchange reserves. The easiest way of measuring the strength or weakness of the dollar is through the exchange rate. . The “exchange rate” is defined as the “value of a country’s currency expressed in the currency of another country” . By using the exchange rate, a country can determine the value of all its economic activities in comparison with other countries. The exchange rate is traded on what is known as a “foreign exchange currency market” or “ ...

With increased globalization, international finance has gone a notch further effectively entertaining more financial transactions than has been previously witnessed. This paper will explore the recent character of the financial markets and instruments in the trade. A financial market refers to the environment in which various types of financial instruments exchange hands or transfer possession through legitimate trade. A financial market does not have to be physical in nature. With increased technological applications and a growing need to bridge distances, financial markets have begun to assume a virtual and representative character.
The current financial markets can be categorised into the following: ...

Currency fluctuation: What causes it and how does it affect our economy?

Introduction
Currency fluctuation refers to the continuing changes between the relative value of a currency issued by a particular country when compared with currency of another country (Heye, 2011). This process in fluctuation in currencies is a phenomenon that transpires every day and affects the relative rate of exchange on a repetitive basis. Currency investors look closely at these fluctuations in currency in attempt to generate profit from their investment. This paper looks at the causes of currency fluctuation, and its affects the economy. Currency fluctuations exhibit both downward and upward movements. When currencies purchased by an investor shows an upward movement ...

Foreign exchange risks affect the value of a company’s assets, liabilities and cash flows when these are denominated in foreign currencies. Fluctuations in the foreign exchange rates have an impact in a firm’s import payments and receivables from export payments. Foreign exchange risks come from trade, i.e., imports and exports, overseas dividends and overseas assets and liabilities. There are however several ways a business can reduce the impact of foreign exchange risk. One way is through forward foreign exchange contracts. In these contracts, two parties agree to exchange two designated currencies at a specific time in the future at a fixed exchange ...

Foreign exchange risk, which is also referred to as currency risk or exchange risk, is a risk that arises from being exposed to unanticipated fluctuations in the exchange rate of currencies of two different countries. Multinational businesses and cross-border investors are often faced with exchange risk when engaging in transactions that involve cross-currency payments at a later date. There various ways of managing exchange risk to minimize financial losses. This paper analyses the various options the business to ensure it is in the best position financially as well as reduce risk exposure.
The first option would be to wait until ...

Hard currency is basically the currencies that are used in developed countries. Hard currency are said to be hard because they are more stable and do not fluctuate in comparison to soft currencies. Currencies such as United States Dollars, Pound Sterling etc are the hard currencies. On the other hand, soft currency is more volatile and these currencies fluctuate more. Currencies of developing countries generally are soft currency. Week currency area also called soft currency (Levi, 2009). There are number of reasons that can cause the soft currencies to fluctuate a lot more than hard currencies and some of the ...

The global finance systems consists of markets, institutions, laws, regulations, and techniques though which bonds, stocks, and other securities are traded, interest rates are determined, and financial services are produced and delivered around the world (McGraw-Hill, nd). In the globalization of each of these components there exists the necessity for transparency and consistency in exchange rate mechanisms in order for business to make appropriate assessments of their international strategy. This does not mean, however, that exchange rate mechanisms are universal in their methodology and a variety of strategies exist. This paper will broadly divide these strategy types in the way ...

Introduction

Electronic currency or digital currency is a common way through which people conduct transactions online. There are many forms of these online currencies that have existed in the past. This includes Liberty Reserve, Perfect Money and Bitcoin. These form standards of measure that is used to create a basis for transactions online. However, it can be identified that there are some online payment outlets like PayPal, Skrill and others that are based on standard currency transactions which are facilitated through these online systems.
The purpose of this paper is to critically examine the concept of Electronic currency and how ...

Introduction

The currency of a nation is used as a medium of exchange and reference in all domestic financial transactions of a country. With globalisation and integration of economies, international business has become a common phenomenon. International business requires buying, selling and exchange of money between two nations. Since, economies across the world have their own currencies and value of each of these currencies vary at any given point in time, relative value of one currency with respect to another becomes an important aspect during international financial transactions. This has concerted international focus on the concept of foreign exchange, which deals with the relative ...

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. ...

Currency Strength and Exchange Rates

On the international market, currency values are set by central banks according to estimates of supply and demand. Changes in the value of currency have a direct effect on international trade. When people in country A demand goods from firms in country B, they must purchase the country B's currency in order to buy the goods.
Just as supply and demand for goods and products can move and shift the the product prices, constant movements in supply and demand for foreign exchange currencies issue price changes in currencies. The effect of this is that the price of money changes ...

Introduction

The current paper consists of two parts: the first part relates effective real and nominal exchange rates of four countries (US, UK, Japan, and Germany) for the period from 1964 to 2012; the second part relates the structure of foreign exchange market and the theory of purchasing power parity theory. This paper relates the issues of nominal and real effective exchange rates, particularities of their construction, and the structure of foreign exchange markets, its participants, and their motivations. Besides, it touches upon purchasing power parity theory, considers arguments for and against the theory, and provides empirical evidence of testing a ...

Task

Compare the corporate form of organization with the sole proprietorship and the partnership.

Describe the principles dealing with ways of creating value and economic efficiency

The major principles include comparative advantage and absolute advantage. Comparative advantage is the ability of a country to produce a particular commodity in a more efficient way than other countries. Countries that have modern machinery are likely to produce machine intensive products than other countries.
Absolute advantage is the ability of a county to be able to produce a particular commodity that other countries do not produce. For instance, a country that is endowed with a unique mineral that is not produced by other countries can be said to have absolute advantage ...

The Bretton Woods conference held in 1944 in New Hampshire in the United States of America at the Mount Washington Hotel, situated in Bretton Woods. The conference also known as the United Nations Monetary and Financial Conference had 730 delegates each representing the allied nation. It aim was to put in regulatory measures to control the international monetary system. The conference aimed at putting the world currencies and monetary systems to order after the World War II. Many policies were passed at the conference, but they became effective in 1958 because the European currencies were not convertible at the ...

The Future of Yuan

China is one of the fastest growing economies in the world. The trade between china and other countries has increased to a great significant with the globalization of the world trade. In this regard, the use of china currency (Yuan) has increased to a great extent. Due to this, china has been struggling to internationalize its currency but this has not been effective so far. This research paper will evaluate the future of the Yuan. It will find out whether the china will succeed in internationalizing its currency like other currencies such as US dollar.
The exports from china to ...

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 ...

Question 1

How should appreciation of a company's home currency affect its cash inflows? How should depreciation of a company's home currency affect its cash inflows?

Exchange gains or losses for a company with subsidiaries resulting from translation of currency are non-cash flow items since they only involve changing one currency to another without movement of cash. Therefore, exchange losses and gains of companies with subsidiaries do not affect the cash inflow since they are non-cash items. However, an appreciation or depreciation of a home currency affects company cash inflows from foreign operations are conducted by branches abroad which are mere extensions of the home ...

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 ...

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 ...

Monetary system refers to instrument adopted by a country or an economic block for facilitating exchange. The monetary system is the means of generating and measuring debt and wealth in financial markets. Currency is the main tool used in monetary system, for measuring economic value. Other means of payments include checks, credit cards and debit cards. The momentary system also describes the economic approach adopted by government with respect to currency exchange market. There are two approaches to currency exchange market operations; fixed rate and floating rate. The Brazilian currency is called the Real (BRL/ R$) and has adopted floating ...

Question 1

Most developing countries have large balance of payment deficit that have accumulated over the years. This has been caused by the high level of dependence by developing countries on the outside world which is evidenced by the large proportion of imports relative to exports. There various measures can be used by developing countries to correct balance of payment deficits.

First, a country can devalue its currency. Devaluation of a nation’s currency will result in downward shift in the value of the domestic currency relative to foreign currencies. Devaluation of the domestic currency will reduce the prices of exports while increasing ...

Reasons for the severe decline in Chinese Stock market in 2015

Between June 2014 and June 2015, the CSI 300 Index rose by 150%, reaching the peak at 5,166.3 on 12th June 2015. What follows was a severe decline in the stock index. Within just one month, the CSI 300 index had lost 30% to 3,507 on July 8. Several factors caused the fall.

Short selling

In the run-up to the stock market decline, investors were aggressively involved in short selling and margin trading. Short-selling and margin trading allowed investors to purchase shares using borrowed money thereby increasing the demand for stocks. Investors engaged in short-selling sell stocks borrowed from ...