...Random Walk with a Variable Drift Peter Rowland Banco de la República* Abstract This study develops three exchange rate models as well as a simple statistical model defined as a random walk with a variable drift. The exchange rate models all use the purchasing power parity hypothesis to account for the long-term relationships between prices and the exchange rate, together with error correction models to represent any shortterm dynamics. The models are estimated for the USD/COP rate of exchange, and their forecast performance is compared to that of a simple random walk as well as to that of the random walk with a variable drift term. Two of the models are shown to outperform the simple random walk on the 12 and 24-months forecasting horizon. However, all the models are outperformed by the random walk with a variable drift, where the drift term is estimated using a Kalman filter. The results suggest that fundamental models might only be a useful tool for forecasting of the exchange rate in the very long run. The opinions expressed here are those of the author and not necessarily of the Banco de la República, the Colombian Central Bank, nor of its Board of Directors. I express my thanks to Luis Eduardo Arango, Javier Gómez, and Luis Fernando Melo for helpful comments and suggestions. Any remaining errors are my own. * Contents 1 2 2.1 2.2 2.3 2.4 2.5 2.6 3 3.1 3.2 3.3 3.4 3.5 3.6 4 4.1 4.2 4.3 5 Introduction Exchange Rate Models A Random Walk with a Variable Drift...
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...be divided into two general parts: the situation analysis, which analyzes the background of the market for the product, and the objectives, strategy and programs based on the background analysis that direct the product manager’s actions. MARKETING PLAN A marketing plan is a written document containing the guidelines for the business center’s marketing programs and allocations over the planning period. Give life to a marketing plan = business plan (CEO) Marketing plan= Chief Marketing Officer. One-year time framework (mostly). Short states and implements. At the end, check and asses. Kotler (NOT MORE than 15 pages). Straight to the topic, NOT wide. What you need and how to get there. * Written document: not something stored in a product manager’s head. It provides a vehicle for communications between functional areas of the firm. It pinpoints responsibility for achieving results by a specified date. * Business center level: the precise level at which plans are written varies from organization to organization. For example, in a company using a band management organizational structure, a marketing plan is written for each brand that is a profit center. Alternatively, some companies write plans for groups of brands or products, particularly when fixed costs are difficult to allocate by individual product. While marketing planning is common, it occurs at different organizational levels. * Planning period: the horizon varies from product to product. Retailing, fashion...
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...Critically evaluate a recent organisational change within your Foundation trust using change theories and draw out the lessons for you as a leader and your organisation. The purpose of this essay is to critically evaluate a recent change within my team, drawing on theories and models of change. I will then integrate theory with practice by using the models that apply to the change within my team. I will also demonstrate the awareness to leadership issues inherent there in. Finally I will demonstrate the use of reflection during the process of change to draw out lessons for me and my organisation. Must there be a change? Change is a common thread that runs through all aspects of life; it said that organisation that handles change successfully thrives whilst those that do not may struggle to survive (Mabey and Mayon-White, 2003).They further suggest that the success or failure of a change varies enormously, depending on the nature of the business, the change and the people involved. A crucial factor of the above is, how far people within a change process understands the change (Connor et al, 2003).Bourne and Bourne (2002) express that change, can be external through technological development, social, political and economic pressure. Or internal as management responds, to a range of issues such as changing client needs as in the case of my team. Change can be classified into number of categories depending on the extent of the change it could be organic (bottom up) or driven...
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...The Tobin Tax And Its Effects On The Foreign Exchange Market International Business Thesis By Mark Hansen 290587-1563 & Nina Johansen 140988-1838 Advisor Niels Blomgren-Hansen 17.05.2010 Executive summary In this thesis a financial transaction tax in the form of the Tobin Tax is examined as a means to reduce volatility on the foreign exchange market. James Tobin original proposal is presented followed by his 1995 paper and Frankel’s contribution to the discussion. Frankel gives merit to Tobin’s line of reasoning on reducing stability by dividing investors into short-term speculators and long-term fundamentalists and defines the former’s activities as destabilizing and the latter as stabilizing. However, we find this segmentation problematic since it is not possible to divide the market participants into these categories in the foreign exchange market. Many of the short-term investors do not necessarily speculate or disregard fundamentals, but rather try to avoid risk. Accordingly, many of the short term market movements are instead stabilizing. Therefore, the Tobin Tax would not only deter the destabilizing transactions, but also the stabilizing ones. If the foreign exchange market is in fact excessively volatile as Tobin argues then the tax could possibly have a positive effect by throwing sand in the wheels and thereby slowing short-term reactions. Our findings suggest that the foreign exchange market is in fact highly volatile, but we find no convincing...
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...A Behavioural Finance view of the Deepwater Horizon Disaster of 2010 INTRODUCTION The Deepwater Horizon disaster of 2010 was the largest accidental marine oil spill the oil industry has ever seen. It claimed 11 lives and caused huge environmental damage on the shoreline of the Gulf of Mexico by discharging circa 4.9 million barrels of oil. There have been numerous enquiries and studies into the accident to try to understand what happened, the goal of the enquiries was to establish where the fault and therefore guilt lay in order to ascertain compensation. This report attempts to apply key concepts from behavioural finance with a view to understanding the thought processes behind the decisions that were made. In the last decades there have been a lot of studies documenting the impact of psychological traits on the decisions made by managers. This report while touching on them, will not go into detail regarding the various technical difficulties encountered on the Deepwater Horizon and will instead focus on understanding the thought process of the various players involved. We will also briefly cover BP’s historical safety record as this will help us understand some of the behavioural factors in play within the organization. While BP was the principal on the Deepwater Horizon rig there were also other parties like Transocean , the rig operator, Halliburton, who operated in a consultancy position, Anadarko and Schlumberger. These companies played a part in the crisis and their...
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...Resume Cost Behavior: Analysis and Use Type of variable costs: * True variable/ proportionately variable pattern: direct material is a true or proportionately variable cost because the amount used during a period will vary in direct proportion to the level of production activity. Moreover, any amounts purchased but not used can be stored and carried forward to the next period as inventory. * Step variable pattern: is the cost of a resource that is obtained in large chunks and that increases or decreases only in response to fairly wide changes in activity. Moreover, any amounts purchased but not currently used can’t be stored as inventory and carried forward to the next period. The relevant range is that range of activity within which the assumptions made about cost behavior is reasonably valid. Except in the case of step variable costs, it’s ordinarily assumed that relationship between cost and volume is a strictly linear. Economist correctly point out that many costs that the accountant classifies as variable actually behave in a curvilinear fashion, that is the relation between cost and activity is a curve. Although many costs are not strictly linear, a curvilinear cost can be satisfactorily approximated with a straight line within a narrow band of activity (relevant range). The dashed line approximates the curvilinear cost with very little loss of accuracy within the shaded relevant range. However, outside of the relevant range this particular straight line...
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...cultural knowledge to read the message, infer it, evaluate the argument and formulate a response. If we want to explain advertising images as a rhetoric one, we need to understand that visuals must have certain capabilities and characteristics. Visual elements are for representing concepts, abstractions, actions, etc. There must be an ability to guide the order of argumentation and visual elements need to carry meaningful variation in manner of delivery. To explain a visual communication complex we would need a symbol theory of pictures: one in which visuals signify by convention and not by resemblance to nature. Author claims, that visual arguments are a symbolic system, because symbol is used as a very general and colorless term. There is new approach to visuals and because of that, we would recast pictures as information in symbolic form; this approach is different from the old one. When we are talking about how images work in advertising world, we need to dig deeper. Pictures provide...
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...indicators like Bollinger band is to check how well these bands work in giving out trade signals. * The study aims to find out using Bloomberg terminal that whether combination of studies and Risk management help to enhance the performance of the indicators and do they really help to make a more profitable decision. * This study also intends to use some basic fundamental indicators to identify whether they can be used as tool to invest in securities and how well they are able to perform as compared to a benchmark index. The aim is to use a matrix of indicators, so that it can be also assessed whether combination of basic indicators are good enough to make portfolio creation judgment that can lead to market beating portfolio or not. * All the testing has been done using the Bloomberg terminal. LIMITATIONS * There are many lead, hybrid and lag indicators available in the market however not every single one can be tested. * The testing only targets the NSE that is typically Indian market, hence the results may be non-inferential for international markets. * The matrix used in fundamental factor back testing only tests out few combinations and only takes into consideration a few fundamental indicators. Hence it is limited by the scope of the study that is to just determine that can there be successful portfolio built using simple indicators or not. AN INTRODUCTION ON TECHNICAL ANALYSIS In finance, technical analysis is a security...
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...take further step in this area of business[2013] | Kaviraj Anandan – 1101600295Ahmad Fairus - | | | Lecturer: Mr. Mohd. Nor Ismail | Graduate Centre for Management ------------------------------------------------- MULTIMEDIA UNIVERSITY TABLE OF CONTENTS Table of Contents 1 Introduction 3 1.1 Company History 3 1.2 Company Overview 4 1.3 Corporate Information 7 1.4 Corporate Vision 7 2 Strategic Analysis 8 2.1 Business Segment 8 2.2 Competitive Landscape 8 2.3 SWOT overview 9 2.3.1 Strength 9 2.3.2 Weakness 9 2.3.3 Opportunity 9 2.3.4 Threat 9 2.4 Business Level Strategy 9 3 Conclusion and Recommendation 15 1 Introduction 2.1 Company History MEASAT, which is derived from the full term of “Malaysia East Asia Satellite” was first develop and launched in 1992 by Binariang Sdn Bhd, to follow suit the then effort of Malaysia’s Prime Minister YA. Bhg Tun Dr Mahathir Mohamed. The purpose of this effort was to develop the communication infrastructure for Malaysia moving into the new millennium. In order to develop and launch Malaysia’s first communication satellite system, Binariang Sdn. Bhd brought together a team of experience and highly motivated experts to get together and share their knowledge and expertise. For Binariang Sdn. Bhd, it took them only a short span of four years for this effort to bear fruit. They started of this project by signing a contract with Hughes Space and Communication Company (now...
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...TABLE OF CONTENTS: Section 1: Introduction: Foreign Exchange Market Overview 5 Section 2: Technical Analysis in Forex Markets 6 Section 3: Basic Technical Analysis Patterns 9 Section 4: Technical Analysis: Charting Techniques 13 Section 4.1:Cycle based indicators 13 Section 4.1.1: Elliot Wave theory 13 Section 4.2:Momentum Indicators 17 Section 4.2.1:MACD: Moving Average Convergence Divergence 18 Section 4.2.2:RSI: Relative Strength Index 19 Section 4.3:Trend approach to technical analysis 21 Section 4.3.1: Moving Averages 21 Section 4.4: Chart Based Indicators 23 Section 4.4.1: Candlestick Charts 23 Section 5: Practical Application to Current trends in the Foreign Exchange Market 28 Section 5.1:Cycle Based 28 Section 5.1.1: Elliot wave 28 Section 5.2: Momentum Based 29 Section 5.2.1:Relative Strength Index 29 Section5.2.2: Moving Average Convergence/Divergence 30 Section 5.3: Trend Based 31 Section 5.3.1: Moving averages 31 Section 5.4: Chart Based 36 Section 5.4.1: Candlesticks 36 Section 6: Technical Analysis: Advantages & Disadvantages 38 Section 7: How traders and dealers use Technical Analysis? 39 Section 8: Bibliography 40 List of Graphs and Figures Figure 1: Technical analysis is based on the premise that markets trend and that those trends tend to persist. 7 Figure 2: Example of a downtrend turning into an uptrend 9 Figure 3: A long term Channel line, support and resistance level 10 Figure 4: head and shoulders pattern. 10 Figure 5: Example...
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...Vision & Objectives |3 | |2.3 Organogram |5 | | | | |3. MARKETING PLAN |6 | |3.1 Product orientation |6 | |3.2 Market Summary |8 | |3.3 Swot Analysis...
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...Impact on Employee Morale during Company Restructuring The worldwide economic crisis has caused too many companies to restructure their corporate setting in order to survive and meet their financial challenges. If you turn on the TV or browse internet these days, it is almost impossible to avoid the bad news of more and more massive layoffs in United States as well as the rest of the world. As this financial crisis deepens, one can’t help asking “Is downsizing or more job cuts our only way out? What is the long term effect of these massive job cuts to our corporation employees? Will we need even longer time to recover from this emotional and morale crisis if the downsizing wasn’t done right?” In this paper, impacts of corporate restructuring on employees’ morale have been explored by reviewing several research papers. Figures were illustrated, strategies were suggested. It is not the question why companies have to downsize or cut jobs, it is how they should do it strategically right to reach the expected goal of benefit and continue to retain the trust and loyalty of the surviving workers. “Trust is one of the most valuable yet brittle assets in any enterprise. So over the long term, it’s far better for companies to downsize in a humane way.” - Robert Reich (Mishra and Spreizer, 1998) During the economic recession, many companies started to restructure their legal, ownership or operation structure in order to be more profitable, competitive and...
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...REFERENCES………………………………………. …..15-16 INTRODUCTION Musical language started changing throughout Europe by famous composers such as Stravinsky and Schoenberg, alone side a new style of music was developed in America called the jazz music, this new style of music that was developed by instrumentalist and singers, predominantly the black Americans who were performing this new style of music along streets, bawdy houses, dance halls and other southern cities. Jazz music can be defined according to according to oxford student dictionary defined jazz music as a style of music with a strong rhythm, originally of African American. Again, jazz music can be describe as a style of music rooted out of improvisation and features by syncopated rhythm, a constant beat pattern with a distinctive tone color and performance techniques. The term jazz became popular around 1915, though it started as early as 1900 but throughout the early period of jazz existence nothing was written down on paper or notated on jazz music due to the fact that jazz music was mostly dominated by improvisation. Moreover, only little of jazz music was recorded as at the early 1900 the only jazz music that was recorded was the original Dixieland band recorded in 1917. Since the development of jazz music, a variety of jazz music was created such as ragtime, swing, new Orleans, bebop, free jazz and cool jazz, jazz music has produce world great performance such...
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...Module name: Accounting in Context Course title: ELEMENT CW2 (LJ) Credit Risk Management Name of Supervisor: Anthony John Bray Student: Dieu Linh Cao. ID number: 12028548. Word count: 4,467 words. Date: 06/03/2013 Executive summary Every day when reading the financial newspapers or news on TV, I notice that the bad debt still has been the big problem of many economics. Bad debt increases which influences to the bank first, and then to the all of the economy. So, I want to do the research about the Credit Risk Management because in my opinion, this is the way to reduce bad debt effectively. In this report, I have researched about 3 models in Credit Risk Management: CreditMetrics, KMV, and Credit Risk Plus. In each model, I explain and analysis the case study from other document sources. Besides, I also compare and contrast the features or the use of them. In addition, critical thinking is applied in this report, when I have found the other idea, from opponent opinion to agreement. Because of the limitation of knowledge and timing, my report still has had many mistakes. Therefore, if I could do this topic again, may be in the dissertation of the master course, I will make it better, with my experience from AIC subject. Table of Contents Executive summary 2 Declaration 4 Content 5 1. CreditMetrics: 7 2. Portfolio Manager of KMV: 11 3. Credit Risk+: 14 Appendix 18 References 20 Declaration I declare that this research report...
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...to specialist, analyst, consultants, developers, programmers, supervisors, and managers, all may at some point be benefited or handicapped by a IT system. Interestingly, each position may have a different perspective of how IT helps them do their job. The purpose of this review is to provide the reader with a clear indication of the benefits of IT on businesses, particularly for managerial effectiveness. Introduction This literature review will focus on the impact of Information Technology on managerial decisions in business organizations. The objective of this review is to highlight nine concepts from various studies from IT group, business industries, and research groups. The concepts have been thoroughly studied and adequate analysis has been done to confidently support the hypothesis in question. “Is Technical Competency a mediator and moderator of managerial effectiveness?” As you read this review you will be presented with arguments that address the ability for IT to enable and impede organizations, perceptions about IT in an organization and how it impacts the use of IT systems, the need for effective alignment of IT systems, areas where IT systems are critical, impact of change management and training of IT life cycle performance, and the key factors influencing IT in large corporations. The literature review will be organized using the thematic review within the body of this paper. Each point and or sub-point will be clearly identified and cited. The goal of...
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