Essays on Madura

Managing a business or any other organization in the modern world involves several challenges. It is important to understand the forces behind globalization and the implications of globalization in management. Globalization is driven by the advancement in technology, removal of barriers to cross-border trade, among other forces. A multinational firm must understand these dynamics to enable to adapt promptly to global changes. The international financial system consists of the foreign exchange market, the international bond market as well the derivative market. The forex market involves the exchange of foreign currencies while the derivative market involves derivative financial instruments such ...

Background

Information communication technology has created a new paradigm in how people communicate in both their personal and business lives. Social networking services have created the capability to create virtual identities that are simple to manage. Technologists consulting with enterprise have proposed different ideas with regard to how social networking can add value to organizations. Wooqer is a cloud-based solution that operates as a graphic interface that manages employee communications with a multitude of communication media. Audio, video, word processing, spreadsheets and presentations can all be managed with the Wooqer package (Venkatagiri & Prakash, 2013). Wooqer uses worker interactions with the ...

Question 1:

Wendy Borg and Jason Kushdog were two entrepreneurs who came together to form Trendsetters Inc. trendsetter Inc. was a startup aimed at providing new warehousing and distribution solutions to clothing retailers. They however had a major challenge of capital as they only had six weeks of operations before they could run out of the initial seed capital they had invested. This prompted them to seek for alternative sources of capital, venture capital being one of the most lucrative one. Neither of them had knowledge in how venture capitals work since Wendy had her background in supply chain management and ...

[Finance] [Why debt security yields vary] There are numerous circumstances that influence the earnings on debt securities and make them alter. The most important of them are:

Variances in term to maturity.

The factor of liquidity. An impact of taxation. Credit risk impacts the earnings on debt securities in the next way: the higher is the credit risk, the higher are yields accordingly. It is essential to take into account that credit rating organizations charge with a certain amount of fee for estimating credit risk. Moreover, the accuracy and oversight of such rating agencies are also to be considered as an important factor. How ...

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 ...

Personal Finance

Personal Finance

Introduction

The economy of the United States impacts personal finance either directly or indirectly. Importantly, the government regulates personal finance through interest rates and taxes. Most taxes are directed to social programs to help the needy. Due to income disparities, citizens opt to acquire credit cards from local banks or other lenders. The credit card allows consumers to spend in advance and keep track of their expenditure. However, those who settle their credit card balance late, pay high-interest rates. The purpose of this paper is to address the role of government in the personal finance. Also, the paper ...

(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 ...

Bulgaria

1. Key criteria and considerations The Bertos Financial Services Inc. is a multinational company with subsidiaries in Mexico, United States of America and Canada, all members of the North American Free Trade Agreement. The company has the objective to open a new subsidiary of the company in a new country with the goal to increase the market penetration and sales of the company (Buckley y Casson). The company has considered ten countries to ten countries to be candidates for the new subsidiary of the company. Those countries are Algeria, Argentina, Qatar, Brazil, Romania, Indonesia, Philippines, Slovenia, Ghana and Czech ...

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 ...

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 ...

Modeling Exchange Rates

Oil price dynamics will have a bearing on the ability of multinational to precisely model the future exchange rates of the foreign exchange in the countries that they operate. In most instances, in order to manage the risk that the firm is exposed in the international business arena, especially on the foreign exchange rate, most multinational will hedge against the risks that are associated with fluctuations in the exchange rate thus minimizing the possible negative effect that a firm may experience (Jain, 2007). Therefore, in order to take a position in hedging facilities such as currency futures, the firm ...

Situation

Speculative Strategy: Currency options Option premium = 1,000,000 × 0.0005 = $500 As shown by the diagram, currency options will help ABC Corporation to mitigate the currency risk. It is speculative since it not only protects the firm from unfavourable movements in the exchange rate but also gives it an opportunity to gain profits. It protects the company from downward movements in the exchange rate since the minimum it can receive is $9,200 irrespective of how low the rate falls. However, the gains from forward exchange rate movements are not limited. If the exchange rate is more than the ...

There are a few ways Blades can advantage from using forecasting methods in looking to expand their operations as Blades is an international roller blades manufacturer. Advantages that include a increase in the rate of return of investment in using the correct forecasting money creates baht-designated money inflows and afterward changes over them to U.S. dollars. Anticipating the conversion scale might permit Blades to settle on a forecasting opportunity that is apparently the most advantageous. Moreover, it is said that Blades might set up an auxiliary in Thailand. If this somehow happened to happen, benefits earned by this auxiliary ...

Fist post

I agree with you that economists and investors should predict the future exchange rate to know when to derive the value of money. The foreign exchange market is purely speculative therefore no model can accurately determine the accurate future exchange rate. Mixed forecasting is the popular method used by traders because it has a wide base i.e. it in cooperates all the other forecasting method. In forecasting, the investor should not only consider the current factors that are affecting the currency value but also the future factors. For example, a country that is politically stable may be facing elections ...

Response to Two Posts

I agree that forecasting error can either be positive or negative. The forecasting error is the bias of the forecasting method, and it can be corrected. Several factors can cause forecasting error. The first One is the inability of business managers to identify correctly the relationship between business variables. In business, there is more than one variable that affects the expected results. Thus, leaving out one variable negates the accuracy of the forecast. The second one is failing to recognize changing trends and incorporating them accurately in the forecasting model. Business keep on changing because of the dynamic nature ...

Net receipts

When the exchange rate is GBP1 = EUR1.37

Option 1: Forward contract

We subtract the forward points from the spot rates since the bid forward point is greater than ask forward points. Beck Plc. will have 8.5 million euros hence it will buy British pounds at the ask rate. Amount receivable = 8,500,0001.4047 = GBP 6,051,114.11 Net amount received = amount receivable – forward contract cost/premium = 6,051,114.11 – 0 = GBP 6,051,114.11

Option 2: Option hedge

We use a put option since it is a receivable. The spot rate is more favourable than the exercise rate hence Beck Plc. will not exercise the option. Amount receivable = ...