...Modern accounting systems achieve accounting needs while contributing improved accurateness in surveying trends, allowing collaboration and giving rapid access to records. Modern accounting systems interweave traditional processing of data and the advanced inputting methods. New systems help management increase their time and profits while spending less. According to the text accounting is “the information system that measures business activity, processes the data into reports, and communicates the results to decision makers” (kllkflksj). Companies use this information for lots of different reasons. For example, when deciding to take out a loan, move forward on a project, or purchase new equipment and many more scenarios. The ease and speed of modern accounting systems allows corporations and individuals to spend less time on the transactions and more time on major decisions and improvements. Modern accounting is not just for businesses. Individuals can input all of their financial information and make important decisions. People can set up spreadsheets to track checking and savings accounts. They can see where their money is actually going. Also, people can set up different spreadsheets to track financial information to even help them decide on what to do with their money. Such as, invest, save, or retire. Modern accounting also reduces costs. Traditional accounting methods use many resources, such as paper and pencil. There are programs out now so people do not have to...
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...Attitude/Mentality, Desire to Learn/Improve, Sportsmanship, Self-Confidence & Listening skills COMMENTS: From what I have seen, Kennedy has produced some solid soccer. She shows sound technical ability and a good understanding of the game. I would like to encourage Kennedy to push herself a little harder in practice as this will speed up her development. During the games I have seen I have been impressed with her attitude and competitiveness, this will help push her along in her soccer endeavors . 1) I would like to see Kennedy utilize her technical skills more often. Meaning, instead of striking the ball up field for distance, to connect a pass or dribble the forward into open space. 2) I believe if Kennedy can concentrate and be present at practice, she will develop into a fine player. I look forward to working with her throughout the rest of the year and future. Keep up the good...
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...imagine a “X” on the floor and use that imaginary line to position yourself. It is important to keep your weight back, this allows a better serve and push into center court Moving to the ball Always remain balanced and positioned. Keep your knees comfortably spaced between your hips. Never sprint to any position, just “flow” there. Ready Position The ready position is with your knees slightly bent, your butt is low, and your ready to receive any shot Keep your racket above waste, due to a shot know as the reflex shot. Read your opponent’s Shot Watch your opponents shoulders. If the shoulders dip down, usually means low shot, if they tilt up, it will probably be a defensive shot. Watch your opponents hips. If they open up or face forward, they are usually going crosscourt. If hips stay closed, they are going down the line. Watch your opponents feet. If they step toward the side wall, they are probably going to hit it on the side wall. In time, you will be able to start being able to “sense” your opponent. Dictate Your Opponent’s Shots Play the center location of the court well. Set up in the area so you can cover all of court, but in a way limit your opponents variety of a shot by not being in the way but putting yourself somewhere they cannot...
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...fans—— who is the best football player in the world now? The answer comes from two famous football players: Cristiano Ronaldo and Lionel Messi. In my opinion, Messi and Cristiano Ronaldo are all excellent football players. They all have masterly football technique and high support. Thousands of football fans from the whole world support them. But I pay more attention on their dissimilarity rather than who is the best one. I think they have much different from each other. It is very interesting to discuss their dissimilarity. First, their position in field is different. Cristiano Ronaldo is a wing forward. The job for a wing forward is creating more chances for the centre forward, shooting from long distance and cutting back for centre. On the other hand, Lionel Messi is a second striker. The job for a second striker is organizing the attack for the whole team, helping the centre forward to get goal and attracting the defend players. Second, their way to get a goal is different. Cristiano Ronaldo is a versatile player. He can use many means to get a goal, such as shooting from long distance, free kick and header. In comparison with Cristiano Ronaldo, Messi just have simplex way to get a goal. His way is shooting from close distance. Although it sounds very humdrum, but Messi’s shoot is very minatory. Third, their peculiarity of dribble is different. The speed of Cristiano Ronaldo’s action is very fast especially for Ronaldo’s legs. Cristiano Ronaldo is a dribble trickster. He always...
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...Indirect b) Spot Rate vs. Forward Rate c) Bid vs. Ask d) Outright vs. Point e) Premium vs. Discount f) Cross Rates g) Appreciation vs. Depreciation 3. Potential Activities a) Arbitrage b) Hedging c) Speculation 4. Spot Arbitrage: Location vs. Triangle The Foreign Exchange Market 1. Participants: a) Large Commercial Banks b) Foreign Exchange Brokers c) Commercial Customers d) Central Banks 2. Size 3. Exchange rate is defined as price or value of a currency expressed in terms of units of another currency. e.g. FF 2.00/$ 2. Quotation Systems 2a. Spot Quotation: Whole sale price of one currency in terms of another currency for immediate delivery. (Two working days). Forward Quotation: Whole sale price of one currency in terms of another currency for future delivery, normally after 1,3 or 6 months. 2b. Direct Quotation: What is the unit of account? Home Currency quoted for one unit of foreign currency. e.g. $7/DM Indirect---1/Direct Indirect Quotation: Foreign Currency quoted for one unit of home currency. 2c. Bid: The Commercial Bank’s buying rate of a foreign currency. Ask: The Commercial Bank’s selling...
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...meaning spot transactions, forwards and swaps and currency options, in April 2013 was $5.3 trillion per day. Other years’ results: | |1998 |2001 |2004 |2007 |2010 2013 | |turnover ($trillions) |1.5 |1.2 |1.9 |3.3 |4 5.3 | | | | | | | | | | | | | | | Reduction between 1998 and 2001 due to (1) introduction of the euro which reduced currency trading in the individual currencies that subsequently made up the euro area and (2) trend of consolidation of the banking sector during that period, so there were fewer banks in the fx market trading amongst themselves. One significant change in the report is a significant increase in trading between foreign exchange dealers, primarily banks and their financial customers, most particularly, increased trading activity with hedge funds, mutual funds, pension funds and insurance companies. One continued trend is that the currency composition of foreign exchange trading has become more diversified. The most widely traded currency in traditional foreign exchange...
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...on a foreign currency quotation, and explain how spreads on foreign currency quotations can differ as a result of market conditions, bank/dealer positions, and trading volume; c. calculate and interpret currency cross rates, given two spot exchange quotations involving three currencies; d. calculate the profit on a triangular arbitrage opportunity, given the bid–ask quotations for the currencies of three countries involved in the arbitrage; e. distinguish between the spot and forward markets for foreign exchange; f. calculate and interpret the spread on a forward foreign currency quotation, and explain how spreads on forward foreign currency quotations can differ as a result of market conditions, bank/dealer positions, trading volume, and maturity/length of contract; g. calculate and interpret a forward discount or premium and express it as an annualized rate; h. explain interest rate parity, and illustrate covered interest arbitrage; i. distinguish between spot and forward transactions, calculate the annualized forward premium/discount for a given currency, and infer whether the currency is "strong" or "weak" FC:DC Foreign currency in domestic currency Bid Price Price the dealer will pay Ask Price Price the deal will sell at Spread Bid ask spread Is expressed as a percentage of either bid, midpoint, or ask rate. Spread depends on mkt conditions, dealer's position, and trading volume for the currency pair Annualized ((forward rate - spot rate)/spot...
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...Donivan Tan Part A - Cash Flow Hedge of Foreign Currency Receivable 11/1/Y1 Accounts receivable (Pesos) [400,000 x $0.23] $92,000 Sales $92,000 No journal entry for the forward contract. Memo entry. 12/31/Y1 Foreign exchange loss $12,000 Accounts receivable (pesos) [400,000 x ($0.23-$0.20)] $12,000 Forward contract [400,000 x ($0.22-$0.18)] x .9610 $15,376 AOCI $15,376 AOCI $12,000 Gain on forward contract $12,000 Premium Expense [($0.22-$0.23) x 400,000]/3 $1,333.33 AOCI $1,333.33 Impact on Year 1 income: Foreign exchange loss (12,000.00) Gain on forward contract 12,000.00 Premium Expense (1,333.33) Impact on net income (1,333.33) 4/30/Y2 Cash – Foreign currency (pesos) (400,000 x $0.19) $76,000 Foreign exchange currency loss $4,000 Accounts receivable (pesos) [20,000 x ($1.12-$1.05)] $80,000 AOCI [400,000 x ($0.22-$0.19) = $12,000 – $15,376] $3,376 Forward contract $3,376 AOCI $4,000 Gain on forward contract $4,000 Premium Expense [($0.22-$0.23) x 400,000] x 2/3 $2,666.67 AOCI $2,666.67 Cash USD [400,000 x $0.22] $88,000 Forward contract $12,000 Cash - Foreign currency (pesos) $76,000 The impact on net income for Year 2 is: Foreign Exchange Loss $(4,000.00) Gain on Forward Contract $ 4,000.00 Premium Expense (2,666.67) Impact on net income (2,666.67) Notes: ...
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...PROJECT REPORT A STUDY ON FOREX RISK MANAGEMENT IN INDIAN OVERSEAS BANK A PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION Submitted by MUTHUKUMAR, S. (Reg. No. 35080344) Submitted to SCHOOL OF MANAGEMENT, SRM UNIVERSITY Under the guidance of Mr. Manikandan Assistant Professor (Sr.G.) DEPARTMENT OF BUSINESS ADMINISTRATION SRM UNIVERSITY MAY – 2010 SCHOOL OF MANAGEMENT SRM UNIVERSITY KATTANKULUTHUR, KANCHIPURAM Dt., - 603203 BONAFIDE CERTIFICATE This is to certify that this project report entitled “A Study on Forex Risk Management in Indian Overseas Bank “ is a Bonafide work done by Mr. Muthukumar S for the partial fulfillment of Master of Business Administration degree, SRM University during the period of study in the academic year 2008-2010. Internal Guide Mr. MANIKANDAN Assistant Professor (Sr.G), School Of Management, SRM University. Head of the Department Dr.JAYSHREE SURESH Dean School Of Management SRM University Submitted for the University Examination held on EXTERNAL EXAMINER DECLARATION I hereby declare that this project report entitled “A Study on Forex Risk Management in Indian Overseas Bank” submitted...
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...exchange exposure, the risk it represents and methods and costs available to limit such exposure. The value of a firm’s assets, liabilities and operating income changes continuously due to change in factors such as exchange rates, interest rates, inflation etc. In other words, a firm is “exposed” to uncertain changes in a number of variables in its environment. Exposure may therefore be defined as a measure of sensitivity of the value of a financial item to changes in the macro economic variables mentioned above. Risk refers to the variability of the value of the item. FOREIGN EXCHANGE EXPOSURE Foreign Exchange Exposure occurs because of unanticipated change in the exchange rate. For example the difference in the spot rate & one month forward rate is 0.30 rupee per USD and after one month rupee depreciates by 30 paisa there would be no FE exposure but if actual depreciation is more, then exposure would be said to exist. The definition of foreign exchange exposure can be summarized using the following equation: ΔV=β0 + β1 (ΔSu) where: V is the change in the value of the asset ΔSu is the unexpected change in the spot rate β1 is the exposure i.e....
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...Firms Note: 1. $-INR Forward contracts denote selling of USD forwards to convert revenues to INR. INR-$ Forward contracts denote buying of USD forwards to meet USD payment obligations. 2. $-INR Option contracts are Put options to sell USD. INR-$ are Call options to buy USD Instruments Currency(mn) Rs (Cr) Nature of exposure Reliance Industries Currency Swaps 1064.49 Options Contracts 2939.76 Forward Contracts 5764.10 Earnings in all businesses are linked to USD. The key input, crude oil is purchased in USD. All export revenues are in foreign currency and local prices are based on import parity prices as well. Maruti Udyog Forward Contracts 6411 (INR-JPY) 70 ($-INR) Import/Royalty payable in Yen and Exports Receivables in dollars. Currency swaps 124.70(USD -INR) Interest rate and forex risk. Mahindra and Mahindra Forward Contracts 350 (INR-JPY) 2(INR-EUR) 27.3($-INR) Trade payables in Yen and Euro and export receivables in dollars. Currency Swaps 5390 (JPY-INR) Interest rate and foreign exchange risk. Arvind Mills Forward Contracts 152.98 ($-INR) 2.25 (GBP-INR) 5 (INR-$) 703.67 21.88 Option Contracts 1 2 2.5 ($-INR) 547.16 Most of the revenue is either in dollars or linked to dollars due to export. Infosys Forward Contracts 119 ($-INR) 529 Options Contracts Range barrier options 4 ($-INR) 8 (INR-$) 2 ($-INR) 3 (Eur-INR) 18 36 971 Revenues denominated in these currencies. Tata Consultancy Services Forward Contracts 15 (Eur-INR) ...
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...countries. However, along with these opportunities come various risks to these companies. One of the main risks these companies will face is foreign currency exchange rate risk. Companies that plan to set up operations in a foreign country must exchange its domestic currency into the currency of the host nation to buy the necessary building materials, supplies, and other necessary resources that the operations will require (Hill, 2009). For example, if a U.S. company desires to set up operations in the country of China, it will have to exchange U.S. dollars currency into Chinese currency-the Yuan. If a company in Japan wants to set up operations in Spain or Italy, it would have to exchange its currency- the Yen into these countries’ currency, which is the Euro. The foreign currency exchange rates between these countries consistently fluctuate causing one to appreciate or depreciate against the other. The unpredictable movement of the foreign currency exchange rates can have adverse effects on a company’s investments, and profits that have operations in a foreign country. Foreign companies with operations in the U.S. normally convert the dollars it earns back into its domestic currency (Hill, 2009). The main foreign currency exchange risk these foreign companies may face is the depreciation of its domestic currency against the currency of the U.S.-the dollar. This transaction can cause potential detrimental actions to its revenues and profits. Mitigating these risks and challenges...
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...Running Head: ECONOMICS FOR THE GLOBAL MANAGER Economics for the Global Manager BUS610 AIU Abstract This paper will discuss a U.S. multinational company named Time Warner that has revenues and cost. It will also discuss two operations under Time Warner operations that contribute to the profits. It will also discuss the means that the company uses to hedge against exchange rate risk. The paper will discuss the effectiveness of increase or decreasing the dollar’s exchange value on the company’s profitability. Economics for the Global Manager Introduction A global leader in media and entertainment, Time Warner Inc. has businesses in television networks, film, and TV entertainment and publishing. Time Warner Inc. uses its industry-leading operating scale and brand to create, package, and deliver high-quality content worldwide through multiple distribution outlets. The operating divisions of Time Warner Inc. are at the top of their categories including Warner Bros. Entertainment and Turner Broadcasting System which are measured by quality, popularity, and financial results. The union on Time Warner Inc. business and employees is based on the passion for storytelling and the commitment to gaining the competitive advantage (About Us, 2013). Revenues The programming services that are provided by Time Warner Inc. are subscription revenues based on contractual programming rates that are negotiated. The advertisements aired in a period are recognized...
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...exchange rate risk. In doing so, the overall profile of the company is discussed; the current foreign exchange risk management instruments are described; and conclusions are drawn, followed by recommendations. International Risk Management: An Analysis of 3M’s Foreign Risk Management International Risk Management: An Analysis of 3M’s Foreign Risk Management Contents Executive Summary 3 Introduction 4 1. Description Historical Exchange Rates 6 2. Foreign Currency Exchange Rate Risk 10 2.1. Current Strategy to Manage Exchange Rate Risk 10 2.1.1. Cash Flow Hedging 10 2.1.2. Net investment hedging 13 2.2. Currency Translation Effects on Business Segments 14 3. Appreciating and Depreciation of Domestic Currency and Foreign Exchange Rate Risk Management 15 3.1. 3M’s Domestic and International Transactions 15 3.2. Appreciation of the Domestic Currency 17 3.3. Depreciation of the Domestic Currency 17 4. Implications of 3M’s Derivatives 18 4.1. Forward and Futures Contracts 18 4.2. Options 19 4.3....
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...International Business (lectures) Balance of payments It has to balance (zero). In theory, it should always be zero, but in real life, it does not always balance. A current account surplus of goods and services exceed imports. The currency here is likely to rise. A current account deficit means imports of goods and services are greater than exports. The US has a great debt. You often have to borrow in this case, if you do not have a savings. It can be easy to borrow one time, but eventually you have to pay the money back that you have borrowed, plus interest. The value of the currency of the given country will fall, and therefore it can be more difficult to export goods to other countries. The US has a low savings rate compared to some of the more poor countries in the world. FDI - Foreign direct investment Greenfield investment, you build an enterprise from the bottom up. Horizontal: FDI in the same industry as the firm operates at home Vertical, two types: * Backward: * Forward: FDI is expensive and it is risky compared to just exporting goods. In the past governments were skeptic about FDI’s, but now they want to try to have a positive effect of FDI’s. Culture Cultural preferences will stay for many years, so therefore a company needs to modify their products, so it meet the costumer’s needs in a given country. Maybe a company can just change the package, so consumer are able to buy the product. Customize an escalator for India? ...
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