...Research Proposal Example 1 The influence of exchange rate volatility on Foreign Direct Investment (FDI) in Nigeria Word Count: 3253 Date: March 2012 Table of Contents Introduction ........................................................................................................................... 1 Aim and Objectives ............................................................................................................... 2 Significance and scope of the study ................................................................................... 3 Key Literature Review ........................................................................................................... 3 Key Words ......................................................................................................................... 3 Literature ........................................................................................................................... 3 Research Design ................................................................................................................... 5 Data Collection methods .................................................................................................... 6 Ethical Issues .................................................................................................................... 6 Research Plan ......................................................................................................................
Words: 4015 - Pages: 17
...TABLE OF CONTENTS DECLARATION ii LIST OF ABBREVIATIONS iii CHAPTER ONE: INTRODUCTION 1 1.1 Background 1 1.1.1 Derivatives 2 1.1.2 Foreign Currency Exposure of a Commercial Bank 3 1.1.3 Effect of derivatives on foreign exchange exposure 5 1.1.4 Commercial Banks in Kenya 6 1.2 Research Problem 7 1.3 Objectives of the Study 8 1.4 Value of the Study 9 CHAPTER TWO: LITERATURE REVIEW 10 2.1 Introduction 10 2.2 Theoretical review 10 2.3 Foreign Exchange Risk Management 13 2.6 Empirical Review 18 2.6 Summary of Literature review 19 CHAPTER THREE: RESEARCH METHODOLOGY 20 3.1 Introduction 20 3.2 Research Design 20 3.3 Study Population 20 3.4 Data Collection Procedures 20 3.5 Data Analysis and Presentation 20 REFERENCES 22 APPENDICES 26 LIST OF ABBREVIATIONS CBK – Central Bank of Kenya ERV - Exchange rate volatility FOREX – Foreign Exchange FX – Foreign Exchange IFE – International Fisher Effect IFX - Income from foreign currencies as a percentage of total income IRP – Interest Rate Parity MST – Market Segmentation Theory NA - Net Assets NFXNA - Net Foreign Currency Exposure Relative to Net Assets NFX - Net Foreign Currency Exposure NSE – Nairobi Securities Exchange OS - Ownership Status or Nature of Ownership PPP – Purchasing Power Parity CHAPTER ONE: INTRODUCTION 1.1 Background The traditional role for commercial banks has been perceived...
Words: 7523 - Pages: 31
... 6. Significance of Study……………………………………… 7 7. Scope and Limitation of the Study………………………… 7 8. Research Methodology……………………………………. 7 II. Literature Review……………………………………………… 8-9 III. Discussion III.1. Interest rate versus exchange rate in Bank deposit……… 10 III.1.1 Appreciate US Dollar in Bank Deposit factor…10-11 III.1.2 Depreciate US Dollar in Bank Deposit factor….. 11 III.2. Interest rate affected in Stock market…………………... 11 III.2.1 Depreciate US Dollar in Stock Market………..11-12 III.2.2 Appreciate US Dollar in Stock Market..................12 IV. Conclusion……………………………………………………… 13 V. References…………………………………………………….14-15 Abstract In this paper, I use high frequency data to investigate the extent to which interest rate changes originated in the United States by the Reserve Federal Fund. More specifically, I am interested in understanding in effects of changes in the Federal Reserve Fund’s interest rates on differential between (short term) local currency interest rates. I also investigate how interest rate influences to the foreign exchange market when Federal set the interest rate. The result indicates that Federal Reserve’s rate can influence foreign exchange market in the bank deposit factor and in the stock market. Key words: U.S Federal Reserve, Federal Fund rate, Interest rate and foreign exchange market. ACKNOWLEDGMENTS First of all, I have been blessed with the help of some wonderful people while preparing this term paper. Thanks...
Words: 3112 - Pages: 13
...MP A R Munich Personal RePEc Archive Optimal choice of an exchange rate regime: a critical literature review Mariam Ouchen Cadi Ayyad University, Faculty of Economics Marrakesh Morocco, University of Basel 17. January 2013 Online at http://mpra.ub.uni-muenchen.de/43907/ MPRA Paper No. 43907, posted 21. January 2013 12:56 UTC Optimal Choice of an Exchange Rate Regime: A Critical Literature Review 1 Mariam OUCHEN Laboratory of innovation, responsibility and sustainable development Cadi Ayyad University, Faculty of Economics Marrakesh Morocco Center of Macroeconomics and economic theory University of Basel Abstract :This paper set out to review the main theories and empirical methods employed in selecting an appropriate exchange rate regime.In order to achieve this, the paper is organized as follows : Section 2 introduces the distinct classifications of exchange regimes(de jure exchange rate regimes versus the facto exchange rate regimes), and the different theoretical approaches which illustrate how an optimal exchange rate regime is determined . Despite their initial popularity, the theoretical considerations have not escaped criticism.Section 3 reviews the criticism of these theories.A conclusion is provided in Section 4. Keywords : Exchange rate regime, the structural approach, credibility, flexibility, the bipolar view. 1 - Introduction The literature on the selection of exchange rate regimes can be divided into three main groups : the structural approach, the trade-off...
Words: 10108 - Pages: 41
...BRAC University Journal, vol. V, no. 2, 2008, pp. 81-91 FOREIGN EXCHANGE RISK MANAGEMENT PRACTICES - A STUDY IN INDIAN SCENARIO Sathya Swaroop Debasish Department of Business Management Fakir Mohan University Vyasa Vihar, Balasore - 756019 Orissa, INDIA ABSTRACT Indian economy in the post-liberalisation era has witnessed increasing awareness of the need for introduction of various risk management products to enable hedging against market risk in a cost effective way. This industry-wide, cross-sectional study concentrates on recent foreign exchange risk management practices and derivatives product usage by large non-banking Indian-based firms. The study is exploratory in nature and aims at an understanding the risk appetite and FERM (Foreign Exchange Risk Management) practices of Indian corporate enterprises. This study focusses on the activity of end-users of financial derivatives and is confined to 501 non-banking corporate enterprises. A combination of simple random and judgement sampling was used for selecting the corporate enterprises and the major statistical tools used were Correlation and Factor analysis. The study finds wide usage of derivative products for risk management and the prime reason of hedging is reduction in volatility of cash flows. VAR (Value-at-Risk) technique was found to be the preferred method of risk evaluation by maximum number of Indian corporate. Further, in terms of the external techniques for risk hedging, the preference...
Words: 5520 - Pages: 23
...Vol. 2, No.4, August 2013 FACTORS AFFECTING THE EXPORT PERFORMANCE OF TEXTILE INDUSTRY IN DEVELOPING COUNTRIES – A REVIEW OF LITERATURE Yoganandan.G & Jaganathan A.T Assistant Professor(s) in Management Studies K.S.R College of Arts and Science Tiruchengode, India Saravanan. R Director and Head, Department of Management Studies Sri Krishna College of Technology Coimbatore, India. SenthilKumar .V M.Phil Scholar in Management Studies K.S.R College of Arts and Science Tiruchengode, India. Abstract The present study aims at reviewing researches conducted in the area of determinants of and factors affecting the export performance of textile industry. The tools used by the various researchers and their findings are studied in order to establish the academic contributions made by these studies to the existing body of knowledge, new models developed and also to highlight method adopted or suggested by researchers for conducting researches in the area of export performance of manufacturing industries with special focus on textile sector in developing countries. The article analyzed researches carried out in China, India, Sri Lank, Bangladesh and Pakistan. These economies are the dominant textile exporters in the international trade. The review highlights that most of the studies have been carried out on establishing the relationship between GDP, exchange rate, labor, capital (FDI) and technology with export performance of textile industry. Most of the researchers found a...
Words: 3428 - Pages: 14
...International Finance: A Course Overview Mihir A. Desai* Harvard University and NBER ABSTRACT This paper describes the International Finance course at Harvard Business School for instructors considering adopting the associated material. The paper begins by arguing that the forces of globalization have fundamentally changed the scope and activities of firms thereby altering the practice of finance within these firms. As a consequence of an increasing reliance on tightly-integrated foreign operations, a parallel world of finance has been opened within every multinational firm and this world has, heretofore, been overlooked. The course materials are designed to address the many aspects of financial decision making within global firms prompted by these changes that are not addressed in traditional materials. The paper provides an overview of the structure of the course and its seven modules with particular emphasis on the three modules that constitute the core of the course. The paper also describes an analytical framework that has been developed through the creation of the course materials to guide critical financial decisions on financing, investment, risk management and incentive management within a multinational firm. This framework emphasizes the need to reconcile conflicting forces in order for multinational firms to gain competitive advantage from their internal capital markets. The paper concludes with a discussion of the course's pedagogical approach and detailed descriptions...
Words: 25419 - Pages: 102
...Chapter 2 REVIEW OF RELATED LITERATURE This chapter presents a review of related literature both foreign and local. This also presents the different variables relative to the study. Related Literature: Foreign Literature According to Martin and Ramino (2002), computers have been domination almost every task that a human can do, making a task easier to do quickly, accurately and efficiently. Computers are a very big help to solve problems nowadays. Charlene Guevarra (2010) cited certain works in her study, here are some: Barnes (1954) stated that Social Network Theory views social relationships in terms of nodes and ties. Social Network is a social structure made up of individuals (or organizations) called “nodes”, which are tied (connected) by one or more specific types of interdependency, such as friendship, kinship, common interest, financial exchange, likes/dislikes, or relationships of beliefs, knowledge or prestige. Moreover Abhyankar (2011) indicated that from the very beginning; human beings always associated themselves to some form of social structure as they evolved across generations. All human beings crave social life, but not all can have time and resources to enjoy social circle where they can communicate, collaborate and freely express themselves with like-minded peers for satisfying their different needs like security, assets, skills, relationships, science and technology, events, politics, history, literature, art, etc. There is no end to the list of...
Words: 289 - Pages: 2
...Introduction The chosen topic for this assignment is "The reliability of technical and fundamental analysis on the Forex exchange market" . The area of research is of great importance's is in the financial market. Many traders believe most important question to any forex trader is how to forecast future market movements. The market fluctuations are often analysis using two core forecasting approaches, fundamentals and technical approaches (Frankel and Froot, 1986,1990). Similar to Dr T Oberlechner studies on the Importance of technical and fundamental analysis in the European foreign exchange market. Making profit and understanding the most profitable means to do is key for any trader. The value of the investigation is priceless to all traders (Stuart 2010). The research will undertake a Basic approach. Basic research can be called a fundamental approach used by a researchers curiosity or interest in a topic. The driving motivation is to expand knowledge of the area not to develop new ideas. (Khan 2010).In order to obtain a good research topic the researcher has taken into account the capability of the work. The capability can be measured in a variety of ways. At the researchers personal level the researcher must feels they are comfortable that they processes or can develop the research skills required to complete the studies. A good research topic is of great importance if it matches career goals (Creswell 2002). With ambition of entering into the wealth management and...
Words: 1572 - Pages: 7
...INTRODUCTION) 2 . BEING AN ENTREPRENEUR IN NIGERIA, PROBLEMS AND PROSPECTS: A STUDY OF 10 SELECT SOLID MINERAL MINING COMPANIES IN EBONYI STATE (STATEMENT OF RESEARCH PROBLEM, STATEMENT OF GENERAL OBJECTIVE, RESEARCH QUESTION, STATEMENT OF HYPOTHESIS) 3. EFFECT OF FOREIGN CURRENCY DEPOSIT ON THE CREDIT CREATION OF COMMERCIAL BANKS IN NIGERIA (AN ABSTRACT) 4 STRATEGY FOR ECONOMIC DEVELOPMENT IN SOUTH KOREA: LESSONS FOR NIGERIA (REVIEW OF RELATED LITERATURE) LECTURER: PROF I. O. C. ABARA ABSTRACT Foreign currency deposits or domiciliary account, are accounts maintained in designated foreign currencies by authorized Nigerian banks for their customers. Such customer could be government, individuals, or corporate bodies. The account falls within the statutory functions of commercial banks in Nigeria, ie mobilization of deposits and credit creation. The introduction of the domiciliary account regime according to the Central Bank of Nigeria (CBN), the monitory policy regulatory agency, is to boost the commercial banks mobilization of deposits and ability to create credit. The implication would be a more robust commercial banking environment. It would also prepare the grounds for a free, open and consequently a deregulated foreign exchange market in Nigeria. The effect of these economic variables in the ability of the commercial banks to discharge on its above statutory function is the focus of this empirical study. Both primary and secondary data sources were used in the study. In analyzing...
Words: 445 - Pages: 2
...Relationship Exchange Rate Stock Price CHAPTER THREE 3.1) introduction This chapter is particularly focused on the various previous studies, which tries to explore the relationship between the exchange rate and stock price. Many studies had been conducted in context to the relation between the exchange rate and stock prices, some studies even have analyzed the relation by considering some of the other variables (like FDI, interest rate, inflation rate ect), to see if these variables have any influence on the fluctuating exchange rate and stock prices. The current literature provides year by year explanation about the Different opinions and arguments of various researches on the relationship between exchange rate and stock prices. For the easy understanding the chapter will be divided into two sections. The first section will cover all the research papers published prior to 1990's. one can observe that most of the studies in section one had established the relationship by measuring the exposure from fluctuating exchange rates to stock prices, so we will name this part as “literature review on measuring the exposure'. And in second section; we cover all the research papers which are published after 1990's and one can observe that some of the studies have established the relation by measuring the causal relation between the exchange rate and stock prices, so we would name the second part as” literature review on measuring the causality relation between the exchange rate and stock...
Words: 3334 - Pages: 14
...Case Study on PepsiCo’s Use of Financial Derivatives 1. Introduction 1.1 PepsiCo’s History The Pepsi-Cola Company was incorporated in 1919 by Caleb Bradham, the inventor of the Pepsi-Cola soft drink. PepsiCo became a multinational beverage and snack food company in 1965 when Pepsi-Cola merged with Frito-Lay. Since the 1965 merger PepsiCo has expanded its operations by acquiring Quaker-Oats, Tropicana, and Gatorade brands. With sales of $66.86 billion in 2014 and with products sold in over 200 countries, PepsiCo is one of the leading food and beverage companies in the world (PepsiCo, 2014). 1.2 PepsiCo’s Industry The beverage and snack food industries are both in the mature stage in their life cycles, and companies in these industries largely depend on product innovation, brand recognition, and low prices to remain competitive. Like all companies PepsiCo faces risk of increases in operating expenses and decreases in net income due to market risk. Companies in PepsiCo’s industry have been forced to expand its product offerings into healthy foods and drinks due to an insurgent health and wellness in American culture. 1.3 PepsiCo’s Competitors PepsiCo’s top competitors consist of The Coca-Cola Company, Dr Pepper Snapple Group, and Nestle; additionally, because PepsiCo is a multinational company it must also compete with countless local snack and beverage companies across the globe. Coca-Cola has been viewed as PepsiCo’s main rival for around 100 years, and the competition...
Words: 4581 - Pages: 19
...Pass-Through Effect of RMB Exchange Rate on China’s Inflation Contents Chapter 2 Literature review 3 2.1 Introduction 3 2.2 Exchange rate pass-through effect 3 2.2.1 Narrowly defined exchange rate pass-through effect 3 2.2.2 Broadly defined exchange rate pass-through effect 4 2.2.3 Complete and incomplete exchange rate pass-through 5 2.3 Relevant theories of exchange rate pass-through 7 2.3.1 Theory of complete exchange rate pass-through 7 2.3.2 Theory of incomplete pass-through 9 2.4 Empirical research on exchange rate pass-through 13 2.5 Summary and reflection 16 Reference 19 Chapter 2 Literature review 2.1 Introduction This chapter reviews the theoretical and empirical researches on exchange rate pass-through effect. Specifically, this chapter firstly introduces the definition of exchange rate pass-through effect, incomplete and complete exchange rate pass-through. Then, this chapter analyses the theory of exchange rate pass-through effect, with focus on the reasons for the common incomplete exchange rate pass-through effect. After theoretical analysis, this chapter reviews and analyses the empirical research on exchange rate pass-through effect. A major part in this section is the review of the perspective and method for analysing exchange rate pass-through effect. Empirical researches generally referred to McCarthy (2000)’s research method, used VAR model, and selected specific area and time window data to empirically analyse exchange rate pass-through...
Words: 6617 - Pages: 27
...2015 Acknowledgements “I would like to express my deepest appreciation to all those who provided me the possibility co complete this report. A special gratitude I give to my lecturer, Mr. Daniel John Blanchett, whose contribution in stimulating suggestions and encouragement, helped me to coordinate my project especially in writing this report. Also another gratitude to God and my friend who help me finish this report in any way they can.” Table of Contents Acknowledgement …………………………………………………………………………………………………………..2 Table of Contents …………………………………………………………………………………………………………….3 Abstract …………………………………………………………………………………………………………………………..4 Introduction ………………………………………………………………………................................................5 Literature Review ……………………………………………………………………………………………………………..6 Methodology ……………………………………………………………………..................................................7 Findings …………………………………………………………………………………………………………………………….8 Conclusion ……………………………………………………………………………………………………………………….12 Recommendation …………………………………………………………………………………………………………….13 Bibliography …………………………………………………………………………………………………………………….14 Abstract This study was to discuss the causes of weakening of Rupiah against US Dollar. It was requested by lecturer in President University, Mr. Daniel Blanchett, currently teaches English 4. It was requested on September 2015. The investigation was done by internet research and shared ideas through group discussions between friends. The main findings were...
Words: 1707 - Pages: 7
...DETERMINATION MACROECON OMICS VARIAB LES AN D S TOCK RETU RN : A CAS E OF F IN AN CE S E CTOR AN D TRAD IN G & S ERVICE S E CTOR IN MALAYS IA P a u lin e Ch ee Ba ch elor of F in a n ce (H on ou r s) 2010 CHAPTER ONE INTRODUCTION 1.1 Introduction Stock market is a place for listed companies to raise capital .Companies can use the capital for continuing operating activities and expand business. However, the investors are explained to get a positive return from dividend and capital gain in the stock market. Based on the history, the economic condition will influence stock market. For instances, Malaysia faced deflation during the Asian crisis in years 1997. It caused the KLCI index sharply reduced from 1207.43 to 470.43. It have been shown that the investors need to predict the stock prices based on the macro factors to get an abnormal return from stock market There were a lot of researches to study the relationship between macroeconomics variables and stock returns. It is important to study the interaction of macroeconomics factor and stock return. Based on the study, the public can identify which factors can influence the stock market and use the knowledge to predict movement of stock price. According to Wongbangpo & Sharma (2002), the research can reveal the functions of stock market in identify the change in economic condition and also can predict the future performance of stock market. Besides, the study will be useful for the stock market participators...
Words: 12578 - Pages: 51
