Transaction And Translation Exposure In International Finance Essay

Transaction And Translation Exposure In International Finance Essay Foreign exchange exposure is a measure of the potential for a firms profitability, net cash flow, and market value to change because of a change in exchange rates. Types of Foreign Exchange Exposure Transaction exposure measures changes in the value of outstanding financial obligations due to a change in exchange rates. Translation exposure deals with changes in cash flows that result from existing contractual obligations. Operating (economic, competitive, or strategic) exposure measures the change in the present value of the firm resulting from any changes in future operating cash flows of the firm caused by an unexpected change in exchange rates [via changes in sales volume, prices and costs.] Impact of Hedging MNEs possess a multitude of cash flows that are sensitive to changes in exchange rates, interest rates, and commodity prices. These three financial price risks are the subject of the growing field of financial risk management. Many firms attempt to manage their currency exposures through hedging. Hedging is the taking of a position that will rise (fall) in value and offset a fall (rise) in the value of an existing position. While hedging can protect the owner of an asset from a loss, it also eliminates any gain from an increase in the value of the asset hedged against. The value of a firm, according to financial theory, is the net present value of all expected future cash flows. Currency risk is defined roughly as the variance in expected cash flows arising from unexpected exchange rate changes. A firm that hedges these exposures reduces some of the variance in the value of its future expected cash flows. However, is a reduction in the variability of cash flows sufficient reason for currency risk management? Opponents of hedging state (among other things): Shareholders are much more capable of diversifying currency risk than the management of the firm. Currency risk management reduces the variance of the cash flows of the firm, but also uses valuable resources. Management often conducts hedging activities that benefit management at the expense of the shareholders (agency conflict), i.e., large FX loss are more embarrassing than the large cost of hedging. Proponents of hedging cite: Reduction in risk in future cash flows improves the planning capability of the firm. Reduction of risk in future cash flows reduces the likelihood that the firms cash flows will fall below a necessary minimum (the point of financial distress) Management has a comparative advantage over the individual shareholder in knowing the actual currency risk of the firm Management is in better position to take advantage of disequilibrium conditions in the market. Transaction Exposure Transaction exposure arises when a firm faces contractual cash flows that are fixed in a foreign currency. Whenever a firm has foreign-currency-denominated receivables or payables, it is subject to transaction exposure, and the eventual settlements have the potential to affect the firms cash flow position. Since modern firms are often involved in commercial and financial contracts denominated in foreign currencies, management of transaction exposure has become an important function of international financial management. Measurement of Transaction Exposure Transaction exposure is simply the amount of foreign currency that is receivable or payable. Since MNCs commonly have foreign subsidiaries spread around the world, they need an information system around the world, they need an information system that can track their currency positions . Identifying Net Transaction Exposure Before an MNC makes any decisions related to hedging, it should identify the individual net transaction exposure on a currency-by-currency basis. The term net here refers to the consolidation of all expected inflows and outflows for a particular time and currency. The management at each subsidiary plays a vital role in reporting its expected inflows and outflows. Then a centralised group consolidates the subsidiary reports to identify, for the MNC as a whole, the expected net positions in each foreign currency during several upcoming periods. The MNC can identify its exposure by reviewing this consolidation of subsidiary positions. One subsidiary may have net receivables in Mexican Pesos three months from now, while a different subsidiary has net payables in Pesos. If the Peso appreciates, this will be favourable to the first subsidiary and unfavourable to the second. However, the impact on the MNC as a whole is at least partially offset. Each subsidiary may desire to hedge its net currency position in order to avoid the possible adverse impacts on its performance due to fluctuations in the currencys value. The overall performance of the MNC, however, may already be insulated by the offsetting positions between subsidiaries. Therefore, hedging the position of each individual subsidiary may not be necessary. Although it is difficult to predict future currency value with much accuracy, MNCs can evaluate historical data to at least assess the potential degree of movement for each currency Standard Deviation The standard deviation statistic is one such possible way to measure the degree of movement for each currency. Notice that within each period, some currencies clearly fluctuate much more than others.

Foreign Policy :: War on Terrorism

A nation’s foreign policy is the result of decades of work designed to answer the needs of a nation, both international and domestic, in the most optimal fashion possible. As a result, a nation’s foreign policy is rarely changed within a single day. September 11th, however, changed the direction and motivation of United States foreign policy in a matter of minutes. With the death of nearly 3,000 Americans, the collapse of the World Trade Center, and the nation’s air traffic control system completely shutdown, terrorism became the number one priority in U.S. foreign policy. Although foreign policy issues that existed prior to September 11th are still being addressed, seemingly everything has taken the back burner to our newly waged War on Terrorism. Currently, the War on Terrorism is being fought on several fronts. Abroad we are coping with the aftermath of war in both Afghanistan and Iraq; we are still hunting for Osama-bin Ladin and Saddam Hussein. We are also once again desperately trying to facilitate peace negotiations between Israel and Palestine in hopes that such efforts will curb terrorism, in both the Middle East and around the globe. At home, there are ongoing efforts to make our country safer through tougher security measures. Since September 11th, President Bush has drastically changed the way the U.S. deals with other nations, both allies and enemies. Presently, our nation is working under a pre-emptive foreign policy. The aim of this new policy is to prevent an attack on our nation by any means necessary. This controversial policy was exercised through President Bush’s pre-emptive strikes in the War with Iraq. In sync with our aggressive change of policy, U.S. military spending has soared above the 288.8 billion spent in the year 2000. Total defense spending for 2003 is 391.6 billion, this accounts for 51.6% of the discretionary budget. Requests for military spending in 2004 further increase to 399.1 billion. Figures such as these have been a source of major criticism for the President. Liberals especially emphasize the escalating costs of the War on Terrorism and on-going operations in Iraq. Foreign Policy :: War on Terrorism A nation’s foreign policy is the result of decades of work designed to answer the needs of a nation, both international and domestic, in the most optimal fashion possible. As a result, a nation’s foreign policy is rarely changed within a single day. September 11th, however, changed the direction and motivation of United States foreign policy in a matter of minutes. With the death of nearly 3,000 Americans, the collapse of the World Trade Center, and the nation’s air traffic control system completely shutdown, terrorism became the number one priority in U.S. foreign policy. Although foreign policy issues that existed prior to September 11th are still being addressed, seemingly everything has taken the back burner to our newly waged War on Terrorism. Currently, the War on Terrorism is being fought on several fronts. Abroad we are coping with the aftermath of war in both Afghanistan and Iraq; we are still hunting for Osama-bin Ladin and Saddam Hussein. We are also once again desperately trying to facilitate peace negotiations between Israel and Palestine in hopes that such efforts will curb terrorism, in both the Middle East and around the globe. At home, there are ongoing efforts to make our country safer through tougher security measures. Since September 11th, President Bush has drastically changed the way the U.S. deals with other nations, both allies and enemies. Presently, our nation is working under a pre-emptive foreign policy. The aim of this new policy is to prevent an attack on our nation by any means necessary. This controversial policy was exercised through President Bush’s pre-emptive strikes in the War with Iraq. In sync with our aggressive change of policy, U.S. military spending has soared above the 288.8 billion spent in the year 2000. Total defense spending for 2003 is 391.6 billion, this accounts for 51.6% of the discretionary budget. Requests for military spending in 2004 further increase to 399.1 billion. Figures such as these have been a source of major criticism for the President. Liberals especially emphasize the escalating costs of the War on Terrorism and on-going operations in Iraq.

Blaise Pascal :: essays research papers

Blaise Pascal was born in Clermont France on June 19, 1623 to Etienne Pascal. His mother died when he was only 3. He was the third of four children and the only boy. He was described as a man of: small stature, poor health, loud spoken, somewhat overbearing, precious, stubbornly persevering, a perfectionist, highly pugnacious yet seeking to be humble and meek. Pascal's father had somewhat unorthodox views on education, so he decided to teach his son himself. He forbade any mathematic teachings or material to be given to him and had any such texts removed from their house. Blaise became engulfed with curiosity due to this rule. He started to work with geometry on his own at the age of 12. He discovered that the sum of the three angles of a triangle is equivalent to two right angles. When his father discovered this he then allowed Blaise a copy of Euclid. At the age of 14 Blaise began accompanying his father to Mersenne's meetings. Mersenne was a member of a religious order of Minims. His cell held many meetings for the likes of Gassendi, Roberval, Carcavi, Auzout, Mydorge, Mylon, Desargues and others. By the time he was 15 Blaise admired the work of Desargues greatly. At 16 Pascal presented a single piece of paper at a Mersenne's meeting in June 1639. It held many of his geometry theorems, including his mystic hexagon. In December 1639 he and his family left Paris and moved to Rouen where his father Etienne was appointed tax collector for Upper Normandy. Soon after settling down in Rouen his Essay on Conic Sections was published in February of 1640. It was his first great work. Pascal also invented the first digital calculator to aid his father in his tax collecting duties. For three years he worked 1642 - 1545. Dubbed the Pascaline, it resembled a mechanical calculator of the 1940's. This almost assuredly makes Pascal second only to Shickard who manufactured the first in 1624. Pascal faced problems with the design of the calculator due to the design of French c urrency at the time. There were 12 deniers in a sol, and 20 sols in a livre. Therefore there were 240 deniers in a livre. Hence Pascal had to deal with more technical problems to work with this odd way of dividing by 240. Yet the currency system remained the same in France until 1799, but Britain's similar system lasted until 1971.

A Play of Contrasts Essay

In this essay I shall discuss the contrasts that have been used in An Inspector Calls. Firstly the contrast, which had stood out the most, was the progress from ignorance to knowledge, this was shown specifically in Sheila; young, pretty and rich Sheila who was show to be ‘very pleased’ with her share of the world at the beginning of the play whereas in stark contrast near the end of the play her character has progressed from naively ignorant satisfaction to opening of her eyes to the facades and indifferent selfishness of the upper classes. For example in Priestley’s stage directions Sheila ‘bitterly’ reacts to Birling and Mrs Birling’s refusal to take responsibility for their actions and want to avoid ‘scandal’ and climb up the social ladder. Therefore the contrast of ignorance and knowledge is depicted in Sheila as she realizes her and her family’s roles in the suicide of Eva Smith/ Daisy Renton. Another significant contrast shown in the play is the difference between the older and younger generations. The main differences between the old and young is that the older generation of Birlings just want to wash their hands of this ‘awkward’ business, such as following the Inspector’s departure Birling discusses only the possible shame that could rob him of his ‘almost certain’ knighthood but does not reflect on his actions towards Eva Smith. This illustrates that Birling was only gutted about his potentially lost doorway to success and status, furthermore when Sheila accuses Birling of unconcern towards the tragedy and lesson that ought to be learnt Birling is highly self centered and talks only of himself- ‘who here will suffer more than I will? ’ Mrs. Birling, playing the role of the obedient and supportive wife, also displays selfish behavior talking about the ‘rude’ tone the Inspector used; this connotes that she is highlighting her superior status to the Inspector, suggesting that he ought to treat her with respect due to her class regardless of any unjust acts she had done. This shows that position and socially acceptable behavior was of more importance than morality and virtue to Mrs. Birling. On the other hand the new generation of Birlings, Sheila and Eric, fully acknowledge the effects of their actions and are affected by their parents lack of empathy towards the tragic end of Eva/Daisy, for example Eric angrily ‘burst out’ that Arthur and Sybil were beginning to ‘pretend’ that nothing had happened. This demonstrates that Eric was aware that his parents had been distressed by Eva’s death but the once the powerful presence of the Inspector had gone they had begun to return to their previous attitudes. Moreover Sheila supports Eric’s attitude by ‘eagerly’ agreeing with him. They both also addresses the collective responsibility of Eva’s death, for example Sheila says ‘ashamed of us’ and Eric says ‘we all helped kill her’ this illustrates that ironically the younger generation was being responsible and was acknowledging not only their parents wrongdoings but their own also. Thus this demonstrates that the younger generation was more responsible and willing to take the burden of guilt whereas the older generation was lacking empathy and attempting to avoid scandal by pretending they had no blame.

Gregor Mendel

Who was Gregor Mendel? Mendel was a scientist who gained a substantial amount of fame from his study of genetics. He studied the pea plant and its inheritance of certain traits. 2. What contributions did he make to science? His study of genetics led to an increase interest in the study of genetics. His biggest contribution to the study of science was his discovery of particulate inheritance, dominant and recessive traits, genotype and phenotype, and the concept of heterozygous and homozygous. . Which species did he work with? Mendel worked with the simple pea pod plant in his 8 year science experiment 4. State his 4 hypothesisThe first part, or law, states that, â€Å"Alternative versions of genes account for variations in inherited characters. † The second law states that, â€Å"For each character trait, like height, color, texture, etc an organism inherits two genes, one from each parent. The third law declares that, â€Å"If the two alleles differ, then one, the dominant allele, is fully expressed in the organism's appearance; the other, the recessive allele, has no noticeable effect on the organism's appearance. † The fourth law states that, â€Å"The two genes for each character segregate during gamete production. † 5. Explain the concept of independent assortment The concept of independent assortment states that the emergence of one trait will not affect the emergence of another.For example, a pea plant's inheritance of the ability to produce purple flowers instead of white ones does not make it more likely that it would also inherit the ability to produce yellow peas in contrast to green ones. 6. What conditions were overlooked by Mendel? Darwin’s theory that â€Å"if the wide variation observable in cultivated plants were caused by the changed conditions and increased nourishment experienced on being brought into cultivation, then this cause of variation must continue to act. †

Energy Drinks Essay

The strategically relevant components for the global and U. S. beverage industry macro-environment are market growth rate, market size, segmentation and scope of rivalry. Economic characteristics of alternative beverage segment differ from other beverage categories in several ways. The market size for alternative beverage was $40. 2 billion globally and $17 billion in the United States, while the market size for other beverages was $ 1,548. 3 and $28. 9 billion globally. Market growth rate for alternative beverages between 2005 and 2009 was 9. 8 percent while for other beverages it was 2. 6 percent. Question two The competition in the alternative beverage market was strong. Pepsi and Coca-Cola were competing for the top spot in the production and distribution of their beverages. The strongest competitive force was bargaining power and leverage of buyers. Most stores were negotiating for lower prices since they bought the beverages in large quantities. Since Pepsi and Coke had an established brand, their alternative beverages found automatic shelf space in most stores and wholesale clubs. The weakest of the five competitive forces was the bargaining power and leverage of suppliers. The reason is that the packaging from different suppliers was similar, thus it was easy to substitute the packaging from most suppliers, and thus they had weak bargaining power. The competitive force that seems to have the greatest effect on industry attractiveness is competition from substitutes. This is why there were many substitutes to alternative beverages that were sold at lower prices. The competitive force with the greatest effect on profitability of new entrants is a threat of entry. Question three The market for energy drinks, sports drinks and vitamin-enhanced drinks is changing in several ways. There is innovation of products with the rise of drinks containing additional nutrients and introduction of energy shots. Furthermore, the industry is also considering consolidation options in an attempt of reducing distribution costs, for example Coca-Cola distributed Hansen’s Monster energy drink. The drivers of change are changes in the long-term growth rate, industry consolidation and introduction of new innovative products into the industry. The forces individually or collectively may not cause big changes in the attractiveness of the industry. The reason for that is there is no evidence that the big companies of alternative beverages will practice unhealthy and aggressive competition for market dominance. Question Four My strategic group map of energy drinks, sports drink and vitamin enhanced beverage industry is categorized by considering the scope of geographic distribution of producers and brand portfolio. Pepsi and Coca-Cola are positioned favorably since they compete internationally and have a strong brand portfolio. Hansen Natural is a dominant brand company since Monster energy drink accounts for 90 percent of its sales. The success of this company is mainly contributed by strong supply chain due to its partnership with Coca-Cola and Anheurser-Busch distributions. Rockstar Inc is also successful in this map since it has a strong distribution chain offered by Pepsi. However, Dream Water and Living Essentials are positioned poorly in this map since their distributions are only regionally located and they only offer a single brand. Question five Several key success factors determine the success of alternative beverage producers. One of these factors is the brand image. Producers with a strong brand image created by extensive advertisement campaigns and endorsement from celebrity athletes enjoyed big sales. Furthermore, products with strong supply chain and distribution network, for example Coca-Cola and Pepsi, had bigger market share. Companies with good innovative skills due to extensive research and product development had more sales since they developed new categories such as energy shots. Companies with huge sales volume enjoyed economies of scale and thus they were able to cover their sales and distribution costs. Question six Coca-Cola should adopt several recommendations to improve its competitiveness in the alternative beverage industry. It should consider increasing its sales in Europe and Asia by conducting extensive market campaigns in these regions. Moreover, it should consider increasing its innovation efforts in order to regain its market share in energy drinks. Another recommendation is considering 5-Hour energy in an attempt of increasing its overall brand portfolio. Pepsi should consider adopting image building campaigns brands such as Amp and Double Shot since their overall market share in Europe has been declining. The company should also consider developing its own energy shot brand in order to diversify its brand portfolio; It would be a good idea to consider introducing energy shots to Europe, Middle East and Austria, since these markets are feasible. Red Bull GmbH should increase its innovation efforts in an attempt to increase its market share in Europe and United States. It should also improve its performance in the new energy shots it introduced in the market.

Ethical Issues in Psychology

Ethical Issues in Psychology Psychologists often work with vulnerable individuals in sensitive situations. An important step in becoming a mental health professional or consumer of psychological services is to be aware of the ethical issues faced by psychologists. If you are providing psychological services you are obligated to remain informed regarding current ethical standards or issues. If you are a consumer of psychological services, the professional should keep you informed regarding your rights.If you find yourself in a situation where ethical standards are being violated or have doubts regarding the correct course of action, consult with a colleague. The faculty of the College of Saint Benedict/Saint John's University joint Psychology Department have identified several key ethical issues with which we believe our students should be familiar. This list is not complete and students will learn much more about ethical issues while going through the psychology curriculum. Near the end of their study, students are asked to demonstrate knowledge of these ethical issues as they apply them in their senior integrative experiences.COMPETENCE: Consumers of psychological services have the right to expect that the practitioner is competent to provide the services offered. Generally, competence is established through training, experience, supervised practice, or a combination of these activities. Any practitioner should be willing to discuss their competencies with any consumer of services and be ready to make referrals to others when an administration of tests like the MMPI or the Wechsler intelligence scales requires understanding of the intricacies of both administration and interpretation.Graduate course work and many hours of supervised practice are needed to acquire the necessary skills. The practitioner is also obligated to keep skills up to date with formal course work, reading, or other professional development activities. CONFIDENTIALITY: Psychologists and co nsumers of psychological services are frequently concerned about the issue of who is allowed to see and use information about individuals generated during research, consultation, or therapy.In most circumstances private information must be kept confidential, that is, it is not revealed to others. However, there are important exceptions to this, mandated by state law and court decisions, and it is important to be aware of them. These exceptions tend to concern situations in which information that is normally confidential can be used to prevent harm to another person. For example, if a client describes abusive behavior toward their children, the therapist is mandated to file a report with social services.Clients, themselves, need to be aware of both the requirements and the limits of confidentiality. INFORMED CONSENT: In their roles as researchers, therapists, and consultants, psychologists offer a variety of services. Informed consent is a central principle in these actions. This mea ns that consumers of psychological services have the right to know precisely what services are being offered, what benefits can be expected, and what risks are involved. After being so informed, consumers then have the right to refuse the services or terminate participation.In research, therapy, or other activities accompanied by some identifiable risk, consent needs to be in writing. When individuals, for some reason, can't give their consent, a surrogate or guardian may be allowed to consent for them. RELATIONSHIPS WITH VULNERABLE INDIVIDUALS: Psychologists frequently interact professionally with clients who are less powerful than themselves because of their age, species, emotional insecurities, intellectual ability, legal status, or other attributes.As a general rule, psychologists are expected to act in the best interests of such individuals, to avoid taking advantage of the vulnerabilities of clients, and to treat animal subjects humanely in accordance with accepted practice. A romantic relationship between a therapist and client is one way that this ethical principle may be violated and is one of the most common causes of lawsuits against therapists. A GENERAL CONCERN FOR ETHICAL PRACTICE: The issues outlined here provide a broad outline of ethical practice in psychology. Specific courses will elaborate on these issues and help you identify situations in which they apply.However, each individual, whether a practitioner or consumer of psychological services, needs to be aware of the role that ethical guidelines play in directing the application of psychology to the problems of the real world. We hope that awareness of specific ethical issues in psychology will broaden your view of the meaning of ethical behavior as it applies to any endeavor. Whether you go into politics, education, business, manufacturing, law, medicine, or any other vocation, you will need to take the time and effort to examine what you are doing in terms of its ethical implications and have the courage to confront unethical behavior.