Free

Exchange Rates - Coursework Example

Comments (0) Cite this document
Summary
Ostrow (2011) observes that minimization of transaction costs and maximization of shareholder value are the two best practices. Maximizing shareholder value is an…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95.8% of users find it useful
Exchange Rates
Read TextPreview

Extract of sample "Exchange Rates"

Exchange Rates of the Affiliate Presentation of the two best practices is aimed at leveraging exchange rate information for increasing profits. Ostrow (2011) observes that minimization of transaction costs and maximization of shareholder value are the two best practices. Maximizing shareholder value is an important tool for increasing exchange rate through the provision of the needed amount of resource so as to increase profits. This practice makes specified quantity of current markets and currency options in improving profitability. Satkunas (2007), views that maximizing shareholder value provided long term goals for excellent operation of an organization and, therefore, enhanced profits in the U.S. In addition to that, it enhanced the income tax rates, cost of capital, sales growth rate which in return maximized profits.
Minimization of transaction costs leverages exchange rates with a target of maximizing profits (Ostrow, 2011). Transaction cost helps in determination of goods and services for leveraging economic exchange rates through the implementation of the minimum prices in the market. Transaction cost consists of the bargaining cost that is regarded as an acceptable agreement for increasing profits. Apart from having economic performance and political stability for seeking out the exchange rate, transaction cost also enhanced investment funds for increasing profits in the U.S.
The monetary policy of the U.S. characterizes the economic environment and is aimed at improving the exchange rates between the U.S. and other countries (Mark, 2002). Banks in the U.S and other nations buy the domestic currency so as to make the exchange rates stable. This therefore means that the supply of money is controlled by the economic environment and targets a rate of interest for enhancing economic growth between the U.S and other nations. Mark (2002) claims that the exchange rate is negatively affected by this economic environment. The value of exchange rates between the U.S and other nations was reduced due to irregular flow of currencies and fluctuations in the exchange rates.
References
Mark P. T. (2002). The Economics of Exchange Rates. Cambridge University Publications of
Data
Ostrow, P., (2011). Sales Forecasting: How Top Performers Leverage the Past, Visualize the
Present, and Improve Their Future Revenue.
Satkunas, K., (2007). Leverage: The Secret to Increased Profitability in a Competitive Market.
Vol. 26 No. 5. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Exchange Rates Coursework Example | Topics and Well Written Essays - 250 words”, n.d.)
Exchange Rates Coursework Example | Topics and Well Written Essays - 250 words. Retrieved from https://studentshare.org/macro-microeconomics/1695443-exchange-rates
(Exchange Rates Coursework Example | Topics and Well Written Essays - 250 Words)
Exchange Rates Coursework Example | Topics and Well Written Essays - 250 Words. https://studentshare.org/macro-microeconomics/1695443-exchange-rates.
“Exchange Rates Coursework Example | Topics and Well Written Essays - 250 Words”, n.d. https://studentshare.org/macro-microeconomics/1695443-exchange-rates.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Exchange Rates

Predictability of Foreign Exchange Rates

...? PREDICTABILITY OF FOREIGN EXCHANGE RATES The objective of this research is to study in detail the concept of predictability in exchange rates, with reference to the period before and after the Bretton Woods System of fixed exchange rate. Also, an attempt has been made to highlight the factors that have varied between these two periods and thus, have resulted in the variability of exchange rate predictability. Simultaneously, the implications of predictability of exchange rates have also been identified so that measures can be taken to reduce the erratic behavior of...
24 Pages(6000 words)Dissertation

USD/CNY: Exchange Rates

...?Running Head: USD/CNY USD/CNY: Exchange Rates Part A: Background Infromation: Initially China followed a policy of keeping its exchange rate extremely low. However, it soon realized the adverse affects of its policy and started appreciating its currency. From the period of 2004 to March 3, 2012, Yuan appreciated by more than 23% and fluctuated between 8.2800 to 6.3039. The following graph shows us that condition of Yuan between 2004 and 2012. Figure 1: China’s exchange rate appreciation and Dollar’s Depreciation Source: Google Finance, 2012 The fluctuation can be divided into the following important periods: Figure 2: Important USD/CNY...
8 Pages(2000 words)Essay

Economics of exchange rates

...but rather on the behavior of the foreign exchange markets (Sarno & Taylor, 2005, p. 83). XJP receives virtually all its supplies directly from J&J Ltd, which, in turn, invoices all the costs and expenditures in Euros. On the contrary, XJP makes its sales in Chinese Renminbi. Therefore, it has to convert the income made from the sales from the Chinese currency into the Euros so that it can submit its payment to J&J Ltd. This means that the amount XJP pays to J&J is not solely dependent on the value of the supplies it receives from this company, but also on the rate at which the Chinese currency exchanges for the Euro. This system is too risky for a business, since when Euro gains value...
4 Pages(1000 words)Essay

Models for Forecasting Exchange Rates

...Models for Forecasting Exchange Rates The models used for an overview of methods to forecast exchange rates can be ified as: Structural Models - Flexible-price monetary (Frenkel-Bilson) model, the sticky-price monetary (Dornbusch-Frankel) model, and the Hooper-Morton model. "The relationship between the three models is best described in the equation: s = ao + al(m - m) + a 2 (y - y) + a 3 (r ,- rs) + a4(n e - ) + a s TB + a 6 TB + u, where s is the logarithm of the dollar price of the foreign currency, m -r the logarithm of the ratio of the US money supply to the foreign money supply, y -j p is the logarithm of the ratio of U.S. to foreign real income, rs-s is the short-term interest rate differential and nC- c... is the...
8 Pages(2000 words)Essay

Exchange Rates

...Exchange Rates Task: Exchange Rates There are several differences between flexible and fixed exchange rates. For example, in flexible exchange rate administration, the governments locate their money supplies and allow the exchange rates liberally adjust according to the ensuing ratio of the two money supplies. However, in a fixed rate administration, one of the two nations, with the agreement of the other, situates the exchange rate and allows its money distribution to adjust to suit to the level needed (Barro, 2008)....
1 Pages(250 words)Essay

Interest Rate Parity, Exchange Rates

..., Young and Barbera (2011) has a high relationship with commitment of all types of employees. He continues to argue that with employee engagement, satisfaction is expressed in the workers who attempt to offer their best in the organization. Studies indicate that, globally, employee engagement has had numerous effects on the esteem of clients of both genders, commitment as well as their pride. Macey, Schneider, Young and Barbera (2011) argue that in organizations where employee engagement has been high rated, the organizations have indicated high performance in major areas that steer organizations to attaining its goals and objectives. Among the areas that have indicated great improvements as a result of employee...
1 Pages(250 words)Essay

Foreign Exchange Rates and Exchange Rate Risk

...Introduction International firms which trade globally has to deal in foreign currencies as international trade mostly takes place either in US $ or Euros. International transactions therefore are not incurred in the local currency of the organization and hence firm has to rely on foreign currency. It is however, important to note that the rates at which a foreign currency will be exchanged with local currency is mostly determined by the external forces, organizations therefore may have to incur losses too due to fluctuations in the foreign exchange rates. Foreign exchange rates in international market are determined by the demand and...
4 Pages(1000 words)Essay

Exchange Rates

...Exchange Rate Risk When we are dealing with currency risks, we need to make sure that we take appropriate steps to mitigate our risks or we might end up losing the bulk of our investment (P. COLLIER, 2012). Currency risk can broadly be divided in to three further categories, namely transaction risk (or transaction exposure), translation risk (or translation exposure) and economic risk (or economic exposure) (BJORN DOHRING, 2008). Below we will discuss each of these three types of risks in detail and determine the nature of the risk faced by the importer in question. Transaction risk occurs over a period of time. For instance, let’s say goods are sold by a vendor in United Kingdom to a customer in United...
8 Pages(2000 words)Essay

Fixed vs. Floating exchange rates

...Fixed vs. Floating exchange rates In a nutshell, an exchange rate refers to the price in one nation’s currency of one unit of another nation’s currency. Ever since the collapse of the Bretton Woods regime (soft peg) in the 1970’s, economists have never concluded the debate whether fixed or floating exchange rates are preferable. In my opinion, foreign exchange rates are crucial promoting international transactions while ensuring adjustments to disequilibrium and shocks. In effect, there are 2 systems of exchange rates i.e. fixed exchange...
2 Pages(500 words)Essay

Forecasting Exchange Rates

...Finance and Accounting: Assignment al Affiliation QUESTION The Thailand money market has been violated and foreign investors are losing confidence. It should not dampen the hopes of Blade Inc to expand their operations in Thailand. The fact that Entertainment product Inc commits itself to import a limited number of Blade’s inc products is attributed to their unfavorable market condition in Thailand. The import from Thailand will be cheaper but their exports could potentially lose value in Thailand market. Unfavorable economic conditions are caused by high inflation and high interest rates in the economic. Using fundamental forecast will depend on interest rate which could help the company understand the trends of the interest rate... in the...
2 Pages(500 words)Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Coursework on topic Exchange Rates for FREE!

Contact Us