purchaser) for 100,000 pounds. DC Inc has determined that its minimum acceptable sale price was 170,000 which therefore implied that its budget exchange rate was $1.70/pound. The transaction risk here is that the exchange rate could fall below $1.70 resulting in a loss to DC. Inc. This paper will analyze four options available to DC Inc to manage its currency exposure: 1. Remain Unhedged 2. Hedge in the forward market 3. Hedge in the money market 4. Hedge in the Options market
Words: 1646 - Pages: 7
Nigeria serve as the monetary control of our great nation Nigeria while the Federal Reserve serve as the central bank of United States of America popularly known as the FED RESERVE . Supervision of money supply, adjustment of interest rate, printing and distribution of currency notes and coins which serve as the nation legal tender, lender of last resort, monitoring commercial banks and other financial institutions activities are monopoly power given to central banks. In most advance countries, central
Words: 2158 - Pages: 9
Federal Reserve System (Fed) consists of the Board of Governors for the Federal Reserve and the twelve Federal Reserve Banks, which control the lending activity of the nation’s banks and thrifts. The Fed controls the money supply to determine the interest rates. Monetary policy encompasses all political and economic measures available to the Central Bank for achieving their objectives, such as providing price-level stability, economic growth, and full employment support. These objectives are at times
Words: 1661 - Pages: 7
History of Devaluation of Indian Rupee & its Impacts The Indian rupee, which was on par with the American currency at the time of Independence in 1947, has depreciated by a little more than 65 times in the past 66 years. At the time of independence, there were no foreign borrowings on India's balance sheet. After independence, India had chosen to adopt a fixed exchange rate currency regime. The rupee was pegged at 4.79 against a dollar between 1948 and 1966. Two consecutive
Words: 5359 - Pages: 22
by monitoring data sets, statistics and indices. Economic data, which are permanently released by the government and statisticians, are a helpful tool to assess the current stage of an economy (e.g., recession, depression). The national unemployment rate, which is released monthly by the Bureau of Labor, is one of the most important economic indicators. This memo will focus on the different types of unemployment, the ways to measure unemployment, the unemployment data itself, and policies that are
Words: 1412 - Pages: 6
refers to the financial transaction where currency value of one country is traded into another country’s currency. The whole process gets done by a network of various financial institutions like banks, investors and governments. The exchange rate varies according to the value of each country’s currency which is based on the health of that particular country’s economy. Any individual or company engaged in overseas business should be aware of the risks of currency fluctuations. Customers without commercial
Words: 10160 - Pages: 41
Business communication Project On [pic] Submitted to Ms. Aastha dewan Prepared by:- Kaushal Dugar Ruchir Rahul Harsh Gupta Jitisha Malhotra INDEX |Serial no. |Topic |Page no. |Remarks | |1
Words: 13670 - Pages: 55
the cash a country receives for the goods and services it exports and funds foreigners spend during their visits (Wisegeek, 2013). When a nation can sustain a positive effect on its trade surplus is an indication that it has a strong control its currency. International trade is the exchange of goods, services, and capital between countries. The United States has become a major competitor in the international trade market to countries such as Japan, and China. These countries along with the United
Words: 974 - Pages: 4
and Fin. Markets, 10e (Mishkin) Chapter 6 The Risk and Term Structure of Interest Rates 6.1 Risk Structure of Interest Rates 1) The risk structure of interest rates is A) the structure of how interest rates move over time. B) the relationship among interest rates of different bonds with the same maturity. C) the relationship among the term to maturity of different bonds. D) the relationship among interest rates on bonds with different maturities. Answer: B Ques Status: Previous Edition
Words: 34661 - Pages: 139
advances in technology, enhanced activities of merger and acquisitions (M&As), launch of the euro as a single currency, changing corporate governance, etc amid financial crises such as recessions following the event of 9/11 etc all have affected the operations of Unilever. These all have led to more accommodating monetary and fiscal policies in the East Asian economies, lowering interest rates in USA and Europe, liquidity expansion, and fiscal and aid packages introduced by Japan which in turn have
Words: 3329 - Pages: 14
