Introduction To Daily Logarithmic Returns Is Done By Reviewing Both Return And Risk Profile For Data

Page 3: Introduction to the Financial System Page 7: Commercial Banks Page 12: The Share Market and the Corporation Page 15: Corporations Issuing Equity into the Share Market Page 19: Investors in the Share Market Page 24: Short-term Debt Page 28: Medium- to Long-term Debt Page 32: Interest Rate Determination and Forecasting Page 37: The Foreign Exchange Market Page 40: Factors that Influence the Exchange Rate Page 42: Futures Contracts and Forward Rate Agreements Page 47: Options

GM can examine the sensitivity of its stock return to fluctuations in the Yen-US Dollar exchange rate (and adjusting for market returns), assuming that market efficiency will account for Dollar-Yen fluctuations.

The goal of this case is to help Sandra Meyer develop a presentation to address Henry Bosse’s concerns about international investments. The general idea is to demonstrate to Henry the benefits of international diversification, if any. To achieve this goal, you need to have a view on 1) the impact of foreign exchange (FX) rates on the return and risk of international investments, and 2) the impact of having more assets on the return and risk of the investment portfolio To form views on these two points, answer the following questions: I. The impact of FX rates on the risk and return of foreign investments 1a) Using data in Appendix A, calculate the

The exchange rates risk that is associated with economic, transaction, and translation exposure in Indian market. From the analysis, anticipate the fluctuations that seem to occur in the next 24 months

Currency exposures assume many forms: they can be assets or liabilities; current or committed; contracted or merely forecast; they can be for trade, investment or balance sheet purposes. Cases of currency exposure can emerge at any point along the value chain, with various repercussions. Each requires a transfer of funds, and for each the rate of exchange is uncertain. Examples of different types of currency exposures are presented below.

This paper aims to compare the Japanese Yen against the US Dollar over a five year period starting from 2005 till 2010. The exchange traded fund for Japanese Yen shall also be discussed in the paper and afterwards an analysis of both the currencies shall be presented. There are different factors that influence the exchange rate differences between any two chosen currencies. The effects produced by these different exchange rates can be of quite different intensity. The most common elements that have an impact on exchange rate difference include economic factors, socio political factors and other behavioral or technical factors also. The macroeconomic factors such as growth of a country, employment rate, gross domestic product etc. All

Due to the geographic diversity of countries where BHP Billiton has extended to, the variation of foreign exchange rate obviously plays a crucial role on its financial performance. According to the annual report of BHP Billiton (2015), US dollar is not only the functional currency utilized in majority of sales and transaction, but also the presentation

Since the great depression, the global economy has been facing a number of ups and downs. With the markets being built rapidly and crashing down in the other instant, elements that actually make up the skeleton of the international economy seems to have correlated variables. These variables seems to have been correlated with each other in numerous combinations and their correlation is what makes the market fluctuate. The volatility of the global market becomes more apparent in times of recession when the correlation between variables like stocks, bonds, US dollar, Euro, gold and oil becomes more apparent. Therefore, it is of paramount importance that these correlated variables should be studied with a very keen eye. Since the link between currencies, commodities, stocks an bonds runs very deep, change in any one of them seems to have a profound impact on the rest hence changing the face of the market.

The goal of this case is to help Sandra Meyer develop a presentation to address Henry Bosse’s concerns about international investments. The general idea is to demonstrate to Henry the benefits of international diversification, if any. To achieve this goal, you need to have a view on 1) the impact of foreign exchange (FX) rates on the return and risk of international investments, and 2) the impact of having more assets on the return and risk of the investment portfolio To form views on these two points, answer the following questions: I. The impact of FX rates on the risk and return of foreign investments 1a) Using data in Appendix A, calculate the

Exhibit 7 from the case study describes the currency development in medium term of the GBP and EURO against the dollar. We can observe that the currencies are exposed to high volatility, which means the company may register greater risk

EXCHANGE RATE CHARTS: Over the last few years, Guatemala 's currency has appreciated with respect to the USD. Guatemala has lost some of its competitive advantage, but since the USD is still significantly higher than GTQ, the currency will not impact trade between US and Guatemala as much. Since the GTQ has appreciated with respect to the USD, this means that imports from the US to Guatemala will be cheaper, therefore improving their imports. However, because it costs more USD to purchase GTQ, the US may choose to import less from Guatemala, therefore their appreciating currency will hurt Guatemala’s exports. Although the currency exchange between the USD and GTQ had its ups and downs throughout the years, it is currently the same exchange rate as exactly 5 years ago (1 USD : 7.68 GTQ).

It is important for investors to consider and understand the changes of influence foreign exchange market have on the stocks. So the investors need to know the currency exposure of the company portfolio.

Investing in emerging markets offer tempting advantages to investors. The volatile economies of countries considered to be in this category have a potential for extraordinary returns. A caveat to investors considering opportunities in emerging markets are the presence of unstable governments, the chance of nationalization, poor property rights protection, and large swings in prices. Emerging markets are far from a sure thing. But, despite high individual risk, emerging markets can reduce portfolio risk. The volatile economies of these countries have such low correlations compared to the domestic market that they actually provide the greatest degree of diversification.

Great Eastern Toys is a company in Hong Kong that exports a huge percent of its total sales to the North American and European markets and hence is exposed to currency risk. Previously, the company was occupied with expanding their business and the company 's management had never given much attention to currency risk until their recent meeting with their banker. The banker pointed out that the depreciation of the European currencies during the previous two years had resulted in a substantial loss of income. The company 's management was indeed convinced that they should begin to devote more time and manage their currency position. In this report, we are going to explore the different options for Great Eastern Toys to hedge

Therefore, the academicians as well as the investment managers have started taking great interest in studying the interaction between stock and foreign exchange markets, as the stock market serves as a composite indicator of the value of investments in an economy. This interaction can be examined at different levels—at firm-level, at industry-level and at aggregate market level. The ‘flow-oriented’ model of Dornbusch and Fischer (1980) postulates that a change in exchange rate affects a firm’s operational exposure, its competitiveness in the international market and, consequently, its share prices. At macro level, the impact of exchange rate fluctuations on stock market depends on the relative importance of international trade in the economy and the nature of trade imbalances of the country. Ma and Kao (1990) find that the currency appreciation negatively affects the domestic stock market for an export-dominant country and positively affects the domestic stock market for an import-dominant country. The portfolio balancing model (Branson, 1983; Frankel, 1983; and Smith, 1992), on the other hand, suggests that the excessive foreign investment flow induced by booming capital market increases the demand for local currency, which leads to appreciation of the currency. Since the pay-off of foreign investors depends on changes in exchange rate as well as