Emerging market carry trade mini case, international finance course, Why so many investors are shorting dollars and eur?
why interest rates are so low in core markets of euro and dollar?
This document discusses several legal and ethical issues related to pricing, including:
1) Unethical pricing strategies like price fixing and predatory pricing that aim to eliminate competition.
2) The concept of price discrimination, where different prices are charged to different customer groups.
3) Factors to consider when setting new product prices, such as costs, perceived value, and competitive positioning.
4) Tactics for fine-tuning prices, including discounts, geographic pricing, and bundling products.
Chapter 07 promoting services and educating customersNardin A
The chapter discusses marketing communications strategies for promoting services. It covers the challenges of communicating intangible services and the roles of various marketing communication tools. The key points are:
1) Marketing communications help position services, educate customers on offerings, promote personnel contributions, and manage demand.
2) Services have challenges like intangibility that require tangible cues and metaphors in promotions.
3) Effective communication planning involves understanding objectives, audiences, messages and appropriate channels.
4) The marketing communications mix for services includes traditional channels like advertising, public relations, and personal selling as well as internet options.
Chapter8 International Finance ManagementPiyush Gaur
This document provides sample answers and solutions to end-of-chapter questions and problems from a chapter about managing transaction exposure. It defines transaction exposure and differentiates it from economic exposure. It discusses and compares hedging transaction exposure using forward contracts versus money market instruments. It also compares the costs of hedging with forward contracts versus options contracts. Additional questions and problems cover topics like currency options, cross-hedging, and the effects of hedging on tax obligations.
This document discusses product and service differentiation. It defines differentiation as distinguishing a product or offering to make it more attractive to a target market compared to competitors. Differentiation is done to defend prices, build a product range within firms, and drive innovation. Products can be differentiated based on attributes, relationships with customers, and linkages between firms. Key factors for differentiating products include price, form, features, customization, performance, quality, durability, reliability, reparability, and style. Service differentiation factors include ordering ease, delivery, installation, customer education, consulting, and repair.
The document discusses how bankers evaluate business loan requests, including analyzing financial statements and ratios to assess expense control, operating efficiency, and profitability. It also covers different methods used by banks to price business loans, such as cost-plus pricing, price leadership models, and customer profitability analysis. The goal is for banks to understand borrowers' ability to repay and set appropriate interest rates to achieve the bank's profit and risk management objectives.
This document discusses the impact of globalization on international business. It begins with an introduction to international business and defines globalization. Globalization has increased economic integration between countries through rising trade, foreign investment, and financial market integration. For businesses, globalization has led to greater competition, access to new technologies and markets, and pressure to meet higher consumer expectations worldwide. It has also allowed more opportunities for outsourcing and procurement internationally. Overall, while globalization presents challenges for international businesses, it also provides significant opportunities to expand operations and take advantage of global markets.
The document summarizes Sheth Model of Industrial Buyer Behaviour. It discusses that the model specifies five processes that create different expectations among purchasing agents, engineers, and users involved in buying: background, information sources, search, perception, and satisfaction. It also outlines factors that determine if a buying decision will be joint or autonomous, including product characteristics and company attributes. The model aims to broaden research on organizational buyer behavior and generate new hypotheses.
1) A product is defined as an idea, physical good, service, or combination thereof that satisfies individual or business needs.
2) There is a continuum between goods and services, with goods being tangible and standardized and services being intangible, perishable, inseparable, and variable.
3) Products can be differentiated based on their attributes and how they are perceived relative to competitors' offerings.
This document discusses several legal and ethical issues related to pricing, including:
1) Unethical pricing strategies like price fixing and predatory pricing that aim to eliminate competition.
2) The concept of price discrimination, where different prices are charged to different customer groups.
3) Factors to consider when setting new product prices, such as costs, perceived value, and competitive positioning.
4) Tactics for fine-tuning prices, including discounts, geographic pricing, and bundling products.
Chapter 07 promoting services and educating customersNardin A
The chapter discusses marketing communications strategies for promoting services. It covers the challenges of communicating intangible services and the roles of various marketing communication tools. The key points are:
1) Marketing communications help position services, educate customers on offerings, promote personnel contributions, and manage demand.
2) Services have challenges like intangibility that require tangible cues and metaphors in promotions.
3) Effective communication planning involves understanding objectives, audiences, messages and appropriate channels.
4) The marketing communications mix for services includes traditional channels like advertising, public relations, and personal selling as well as internet options.
Chapter8 International Finance ManagementPiyush Gaur
This document provides sample answers and solutions to end-of-chapter questions and problems from a chapter about managing transaction exposure. It defines transaction exposure and differentiates it from economic exposure. It discusses and compares hedging transaction exposure using forward contracts versus money market instruments. It also compares the costs of hedging with forward contracts versus options contracts. Additional questions and problems cover topics like currency options, cross-hedging, and the effects of hedging on tax obligations.
This document discusses product and service differentiation. It defines differentiation as distinguishing a product or offering to make it more attractive to a target market compared to competitors. Differentiation is done to defend prices, build a product range within firms, and drive innovation. Products can be differentiated based on attributes, relationships with customers, and linkages between firms. Key factors for differentiating products include price, form, features, customization, performance, quality, durability, reliability, reparability, and style. Service differentiation factors include ordering ease, delivery, installation, customer education, consulting, and repair.
The document discusses how bankers evaluate business loan requests, including analyzing financial statements and ratios to assess expense control, operating efficiency, and profitability. It also covers different methods used by banks to price business loans, such as cost-plus pricing, price leadership models, and customer profitability analysis. The goal is for banks to understand borrowers' ability to repay and set appropriate interest rates to achieve the bank's profit and risk management objectives.
This document discusses the impact of globalization on international business. It begins with an introduction to international business and defines globalization. Globalization has increased economic integration between countries through rising trade, foreign investment, and financial market integration. For businesses, globalization has led to greater competition, access to new technologies and markets, and pressure to meet higher consumer expectations worldwide. It has also allowed more opportunities for outsourcing and procurement internationally. Overall, while globalization presents challenges for international businesses, it also provides significant opportunities to expand operations and take advantage of global markets.
The document summarizes Sheth Model of Industrial Buyer Behaviour. It discusses that the model specifies five processes that create different expectations among purchasing agents, engineers, and users involved in buying: background, information sources, search, perception, and satisfaction. It also outlines factors that determine if a buying decision will be joint or autonomous, including product characteristics and company attributes. The model aims to broaden research on organizational buyer behavior and generate new hypotheses.
1) A product is defined as an idea, physical good, service, or combination thereof that satisfies individual or business needs.
2) There is a continuum between goods and services, with goods being tangible and standardized and services being intangible, perishable, inseparable, and variable.
3) Products can be differentiated based on their attributes and how they are perceived relative to competitors' offerings.
Brant preference on mobile phones among studentsakhilplakkal
The document discusses the history and evolution of mobile phones over several generations from the 1970s to present. It describes early mobile phone systems from the 1970s that were limited to cars and required operators. The first automated mobile phone system was introduced in Sweden in 1960. Major developments included the 1G analog cellular networks in the late 1970s and 1980s, the 2G digital GSM and CDMA standards in the 1990s, and the introduction of SMS messaging. The mobile internet was first introduced by NTT DoCoMo in 1999. The evolution of mobile phones has been driven by technological advances in areas like batteries, components, and network infrastructure that have made phones smaller and increased capabilities.
This document discusses supplementary services that organizations can provide to enhance their core products or services. It identifies eight categories of supplementary services: information, order taking, billing, payment, consultation, hospitality, safe keeping, and exceptions handling. The document emphasizes that providing additional value-added services helps create value for customers.
Trade area analysis defines the geographic area from which a retailer draws customers. It identifies where customers come from, how many are in the trade area, and where to find more. Factors like demographics, income, competition and transportation access affect the trade area. Common techniques to define trade areas are radial studies, gravity models and drive time analysis. Understanding trade areas helps with site selection, targeting marketing and improving sales performance.
The document discusses factors that affect channel selection and management of distribution channels. It outlines various considerations including product characteristics, market factors, company resources, middlemen, environmental issues, and conflicts that can arise. It also discusses strategies for evaluating channel performance and resolving conflicts through communication, negotiation, and establishing superordinate goals.
The document discusses key aspects of pricing strategies and revenue management for services. It covers the objectives of service pricing, the pricing tripod approach using cost-based, value-based and competition-based pricing, and how revenue management aims to maximize revenue by setting prices according to customer demand segments. Ethical concerns in pricing are also addressed, such as ensuring fair and transparent pricing schedules and communications.
Chapter18 International Finance ManagementPiyush Gaur
Dorchester Ltd is considering building a new manufacturing plant in the US to expand its candy production and sales in North America. The initial cost of the plant would be $7 million. Local debt financing of $1.5 million at 7.75% interest would be provided. Dorchester must decide whether to issue additional debt in pounds sterling at 10.75% or US dollars at 9.5%.
Building the new plant would allow Dorchester to serve the entire North American market and realize higher profits of $4.40 per pound sold. However, the analysis of costs, revenues, tax rates, debt financing, and exchange rates is complex given the international dimensions. A full capital budgeting analysis is required to
Christopher Lovelock developed the service flower model to illustrate core services surrounded by supplementary services. The model consists of 8 petals, with 4 facilitating supplementary services of information, order taking, billing, and payment that support the core product or service. The other 4 enhancing supplementary services are consultation, hospitality, safe keeping, and exceptions handling that enhance the customer experience.
This document discusses international finance concepts including exchange rates, forward rates, purchasing power parity, interest rate parity, and exchange rate risk. It provides examples and explanations of these topics. For instance, it explains that if the yen spot price is 108.173 yen per dollar and the 1-year forward rate is 111.715 yen per dollar, then the dollar is selling at a 3.27% premium relative to the yen. It also works through examples of calculating forward rates and converting cash flows between currencies.
This document summarizes a seminar presentation on Vodafone's marketing strategies. Vodafone's vision is to enrich customers' lives through mobile communication. Some of Vodafone's awards include being named the best mobile money service for the unbanked in 2011. The presentation discusses Vodafone's business strategies and the results of a survey showing that most users choose Vodafone for its call rates and learn about Vodafone through advertisements.
This document discusses common investment mistakes and biases that can negatively impact investment decisions. It begins by outlining several cognitive biases like overconfidence, availability bias, and loss aversion that can lead investors to make poor choices. It then provides examples of how these biases might influence decisions around individual stocks. The document concludes by discussing lessons that can be learned from successful long-term investors like Warren Buffett, including the importance of patience, understanding investments, and having a consistent strategy.
Services Marketing
Chapter – 9
Pricing Of Services
Introduction
Pricing or Price is the key element in the traditional marketing mix (the 4Ps) and also the enhanced marketing mix (the 7 Ps). This is the element which earns revenue. This is highly critical because this is the strategy which can make or mar the business.
The firms must make it both ways –the price must
(1) get profits for the firm, and
(2) give value to its customers.
Names of Service Pricing
Pricing for goods is easy and straight forward, while for services it is complicated, may be controlled by several authorities, varies with time, place, people, etc.
For goods the price has a single name “PRICE”, but for services it has several names like :
Names of Service Prices
What Makes Service Pricing Different?
No Ownership of Services
Higher Ratio of Fixed Costs to Variable Costs
Variability of Both Inputs and Outputs.
Many Services Are Hard to Evaluate
This document discusses pricing strategies for services. It explains that effective pricing requires considering costs, competition, and customer value. Revenue management can improve profits by allocating capacity to high-paying customers through restrictions like advance booking. Ethical pricing requires clear, logical schedules and communicating customer benefits. Key questions in price design include how much to charge, payment terms, and communicating prices.
This document discusses training, motivating, compensating, and leading the salesforce. It covers key topics such as:
- The sales training process including assessing needs, designing programs, and evaluating impact. Various training methods are described.
- The importance of motivating salespeople and different motivational theories and tools that can be used.
- The objectives and steps for designing an effective sales compensation plan, including examining job descriptions, setting objectives, and developing the compensation mix. Common plan types like salary, commission, and combination plans are explained.
- The role and skills of sales leadership in supervising and guiding the salesforce. Methods for evaluating training programs and sales performance are also outlined.
The document discusses building customer loyalty through segmentation, service quality, and relationship depth. It recommends segmenting customers based on their value, spending habits, and maintenance costs. The goal is to focus on high-value customers that spend more over time while limiting interactions with low-value customers. Building loyalty requires deepening relationships through rewards and higher engagement levels. Reducing churn also involves identifying and addressing its key drivers, like complaints, through improved service recovery and increased switching costs.
Environmental influences on pricing decisions are discussed like currency fluctuations, exchange rat clauses, effect of inflation , government policies, competition etc.
Chapter 06 setting prices and implementing revenue managementNardin A
This chapter discusses pricing strategies for services. It covers setting prices based on costs, value to customers, and competitors. Revenue management aims to maximize revenue by adjusting prices for different customer segments. Rate fences help separate segments. The chapter also addresses ethical issues in pricing complexity and fairness. Effective implementation requires determining the price level and basis, who collects payment, and how to communicate prices.
The document discusses marketing to children and perceptions of child psychology. It notes that modern children are decision-makers who can influence parents' purchasing, and that marketers should understand children are tomorrow's consumers. However, advertising targeting children is unfair as it exploits their inability to recognize persuasive intent. Everything from product design to communication should be linked to what makes children happy about products in an ethical way.
This document discusses the debate between standardization and customization in global marketing. It notes that while standardization allows companies to achieve economies of scale, full standardization may not be appropriate given variations across markets in customer preferences and regulations. Companies must determine the best combination of global and local activities. The document provides several examples of companies that take different approaches, such as McDonald's using a global brand but some localized products, and concludes that adjusting strategies to account for market variations enhances success.
Market Segmentation - Five Essential CriteriaMBA & Company
Market segmentation involves dividing broad target markets into specific consumer groups. There are 5 essential criteria for viable market segments: 1) They must be measurable in terms of size. 2) Be a substantial homogeneous group that will not quickly change. 3) Be accessible via appropriate marketing approaches. 4) Be internally similar but externally different from other segments. 5) Provide actionable data to inform marketing positions and sales approaches that can be quantified. Proper market segmentation allows for an efficient targeted approach to customers.
This document provides information about Vodafone, including its history as a public limited company incorporated in England with a global presence, mission to leverage mobile technology, vision to be a trusted brand, and values of passion for customers, employees, results, and society. It also outlines the key components of running an ecommerce store, including merchandise, security, placement, presentation, payment, and fulfillment. Gaps between consumer expectations and management perceptions are identified. Recommendations include implementing an online purchasing system and mapping products to the customer decision process. The business model sections specify value propositions, target segments, benefits, resources, offerings, and revenue models.
This document summarizes the key aspects of investing in the foreign exchange (forex) market through Tokiwa Investments Inc. It outlines the size and liquidity of the forex market, compares it to other investment types, describes the currency pairs traded, and explains how to open an account and strategies for limiting risk when trading currencies.
Global synchronization provide upward bias to Equity based investments once again. In depth look at how Janney breaks down the year ahead and where to invest to take advantage of the reemergence of Global Growth.
Brant preference on mobile phones among studentsakhilplakkal
The document discusses the history and evolution of mobile phones over several generations from the 1970s to present. It describes early mobile phone systems from the 1970s that were limited to cars and required operators. The first automated mobile phone system was introduced in Sweden in 1960. Major developments included the 1G analog cellular networks in the late 1970s and 1980s, the 2G digital GSM and CDMA standards in the 1990s, and the introduction of SMS messaging. The mobile internet was first introduced by NTT DoCoMo in 1999. The evolution of mobile phones has been driven by technological advances in areas like batteries, components, and network infrastructure that have made phones smaller and increased capabilities.
This document discusses supplementary services that organizations can provide to enhance their core products or services. It identifies eight categories of supplementary services: information, order taking, billing, payment, consultation, hospitality, safe keeping, and exceptions handling. The document emphasizes that providing additional value-added services helps create value for customers.
Trade area analysis defines the geographic area from which a retailer draws customers. It identifies where customers come from, how many are in the trade area, and where to find more. Factors like demographics, income, competition and transportation access affect the trade area. Common techniques to define trade areas are radial studies, gravity models and drive time analysis. Understanding trade areas helps with site selection, targeting marketing and improving sales performance.
The document discusses factors that affect channel selection and management of distribution channels. It outlines various considerations including product characteristics, market factors, company resources, middlemen, environmental issues, and conflicts that can arise. It also discusses strategies for evaluating channel performance and resolving conflicts through communication, negotiation, and establishing superordinate goals.
The document discusses key aspects of pricing strategies and revenue management for services. It covers the objectives of service pricing, the pricing tripod approach using cost-based, value-based and competition-based pricing, and how revenue management aims to maximize revenue by setting prices according to customer demand segments. Ethical concerns in pricing are also addressed, such as ensuring fair and transparent pricing schedules and communications.
Chapter18 International Finance ManagementPiyush Gaur
Dorchester Ltd is considering building a new manufacturing plant in the US to expand its candy production and sales in North America. The initial cost of the plant would be $7 million. Local debt financing of $1.5 million at 7.75% interest would be provided. Dorchester must decide whether to issue additional debt in pounds sterling at 10.75% or US dollars at 9.5%.
Building the new plant would allow Dorchester to serve the entire North American market and realize higher profits of $4.40 per pound sold. However, the analysis of costs, revenues, tax rates, debt financing, and exchange rates is complex given the international dimensions. A full capital budgeting analysis is required to
Christopher Lovelock developed the service flower model to illustrate core services surrounded by supplementary services. The model consists of 8 petals, with 4 facilitating supplementary services of information, order taking, billing, and payment that support the core product or service. The other 4 enhancing supplementary services are consultation, hospitality, safe keeping, and exceptions handling that enhance the customer experience.
This document discusses international finance concepts including exchange rates, forward rates, purchasing power parity, interest rate parity, and exchange rate risk. It provides examples and explanations of these topics. For instance, it explains that if the yen spot price is 108.173 yen per dollar and the 1-year forward rate is 111.715 yen per dollar, then the dollar is selling at a 3.27% premium relative to the yen. It also works through examples of calculating forward rates and converting cash flows between currencies.
This document summarizes a seminar presentation on Vodafone's marketing strategies. Vodafone's vision is to enrich customers' lives through mobile communication. Some of Vodafone's awards include being named the best mobile money service for the unbanked in 2011. The presentation discusses Vodafone's business strategies and the results of a survey showing that most users choose Vodafone for its call rates and learn about Vodafone through advertisements.
This document discusses common investment mistakes and biases that can negatively impact investment decisions. It begins by outlining several cognitive biases like overconfidence, availability bias, and loss aversion that can lead investors to make poor choices. It then provides examples of how these biases might influence decisions around individual stocks. The document concludes by discussing lessons that can be learned from successful long-term investors like Warren Buffett, including the importance of patience, understanding investments, and having a consistent strategy.
Services Marketing
Chapter – 9
Pricing Of Services
Introduction
Pricing or Price is the key element in the traditional marketing mix (the 4Ps) and also the enhanced marketing mix (the 7 Ps). This is the element which earns revenue. This is highly critical because this is the strategy which can make or mar the business.
The firms must make it both ways –the price must
(1) get profits for the firm, and
(2) give value to its customers.
Names of Service Pricing
Pricing for goods is easy and straight forward, while for services it is complicated, may be controlled by several authorities, varies with time, place, people, etc.
For goods the price has a single name “PRICE”, but for services it has several names like :
Names of Service Prices
What Makes Service Pricing Different?
No Ownership of Services
Higher Ratio of Fixed Costs to Variable Costs
Variability of Both Inputs and Outputs.
Many Services Are Hard to Evaluate
This document discusses pricing strategies for services. It explains that effective pricing requires considering costs, competition, and customer value. Revenue management can improve profits by allocating capacity to high-paying customers through restrictions like advance booking. Ethical pricing requires clear, logical schedules and communicating customer benefits. Key questions in price design include how much to charge, payment terms, and communicating prices.
This document discusses training, motivating, compensating, and leading the salesforce. It covers key topics such as:
- The sales training process including assessing needs, designing programs, and evaluating impact. Various training methods are described.
- The importance of motivating salespeople and different motivational theories and tools that can be used.
- The objectives and steps for designing an effective sales compensation plan, including examining job descriptions, setting objectives, and developing the compensation mix. Common plan types like salary, commission, and combination plans are explained.
- The role and skills of sales leadership in supervising and guiding the salesforce. Methods for evaluating training programs and sales performance are also outlined.
The document discusses building customer loyalty through segmentation, service quality, and relationship depth. It recommends segmenting customers based on their value, spending habits, and maintenance costs. The goal is to focus on high-value customers that spend more over time while limiting interactions with low-value customers. Building loyalty requires deepening relationships through rewards and higher engagement levels. Reducing churn also involves identifying and addressing its key drivers, like complaints, through improved service recovery and increased switching costs.
Environmental influences on pricing decisions are discussed like currency fluctuations, exchange rat clauses, effect of inflation , government policies, competition etc.
Chapter 06 setting prices and implementing revenue managementNardin A
This chapter discusses pricing strategies for services. It covers setting prices based on costs, value to customers, and competitors. Revenue management aims to maximize revenue by adjusting prices for different customer segments. Rate fences help separate segments. The chapter also addresses ethical issues in pricing complexity and fairness. Effective implementation requires determining the price level and basis, who collects payment, and how to communicate prices.
The document discusses marketing to children and perceptions of child psychology. It notes that modern children are decision-makers who can influence parents' purchasing, and that marketers should understand children are tomorrow's consumers. However, advertising targeting children is unfair as it exploits their inability to recognize persuasive intent. Everything from product design to communication should be linked to what makes children happy about products in an ethical way.
This document discusses the debate between standardization and customization in global marketing. It notes that while standardization allows companies to achieve economies of scale, full standardization may not be appropriate given variations across markets in customer preferences and regulations. Companies must determine the best combination of global and local activities. The document provides several examples of companies that take different approaches, such as McDonald's using a global brand but some localized products, and concludes that adjusting strategies to account for market variations enhances success.
Market Segmentation - Five Essential CriteriaMBA & Company
Market segmentation involves dividing broad target markets into specific consumer groups. There are 5 essential criteria for viable market segments: 1) They must be measurable in terms of size. 2) Be a substantial homogeneous group that will not quickly change. 3) Be accessible via appropriate marketing approaches. 4) Be internally similar but externally different from other segments. 5) Provide actionable data to inform marketing positions and sales approaches that can be quantified. Proper market segmentation allows for an efficient targeted approach to customers.
This document provides information about Vodafone, including its history as a public limited company incorporated in England with a global presence, mission to leverage mobile technology, vision to be a trusted brand, and values of passion for customers, employees, results, and society. It also outlines the key components of running an ecommerce store, including merchandise, security, placement, presentation, payment, and fulfillment. Gaps between consumer expectations and management perceptions are identified. Recommendations include implementing an online purchasing system and mapping products to the customer decision process. The business model sections specify value propositions, target segments, benefits, resources, offerings, and revenue models.
This document summarizes the key aspects of investing in the foreign exchange (forex) market through Tokiwa Investments Inc. It outlines the size and liquidity of the forex market, compares it to other investment types, describes the currency pairs traded, and explains how to open an account and strategies for limiting risk when trading currencies.
Global synchronization provide upward bias to Equity based investments once again. In depth look at how Janney breaks down the year ahead and where to invest to take advantage of the reemergence of Global Growth.
The document provides an overview of markets and investment outlook from various managers in the last quarter. Key points include:
- Markets performed well despite initial Brexit reaction, with UK and international equities rising. Bonds and commodities also rose.
- Managers are assessing economic outlooks, seeing potential for US growth but concerns in Europe. Some see opportunities from coordinated fiscal plans.
- Managers have mixed views on regions like Japan, Europe, and property exposure. Bonds are largely held for safety over yield.
- The outlook discusses navigating uncertainty after Brexit through diversification. Unemployment rates suggest the UK economy remains stronger than Eurozone economies.
The document provides an overview of markets and investment outlook from various managers in the last quarter. Key points include:
- Markets performed well despite initial Brexit reaction, with UK and international equities rising. Bonds and commodities also rose.
- Managers are assessing economic outlooks, seeing potential for US growth but concerns in Europe. Some see opportunities from coordinated fiscal plans.
- Managers have mixed views on regions like Japan, Europe, and property exposure. Bonds are largely held for safety over yield.
- The outlook discusses navigating uncertainty after Brexit through diversification. Unemployment rates suggest the UK economy remains stronger than Eurozone economies.
This document provides an introduction to money and banking. It discusses how money flows through the economy with the help of banks and financial markets, and how government policy and the Federal Reserve influence monetary systems. Key entities like the Federal Reserve determine money supply and interest rates, regulate banks, and aim to prevent crises like bank runs. The document also presents 10 surprising facts about money and banking, such as how interest compounds over time, how foreign holdings of U.S. dollars exceed domestic holdings, and how the Federal Reserve creates money through accounting adjustments.
The foreign exchange market is the largest financial market in the world, with over $4 trillion traded daily. It allows for the buying, selling, and exchange of global currencies. There are two tiers of traders in the forex market: the interbank market of large banks and the over-the-counter market of companies and individuals. Exchange rates can be fixed by governments, floating based on supply and demand, and quoted directly or indirectly. The most popular currency pairs traded are EUR/USD, USD/JPY, GBP/USD, and USD/CHF. Asian nations like China and Japan hold the largest foreign exchange reserves. Factors that influence exchange rates include central bank policies, interest rates, inflation rates,
Covered interest parity a law of nature in currency marketsGE 94
CIP is a cornerstone principle in international finance. First described by John Maynard Keynes in 1923, the idea that FX forward rates must reflect interest rate differentials between currencies has long been considered one of the best tested theories in financial economics. If a market participant is willing to swap a higher yielding currency for a lower yielding currency over some time horizon, he must be compensated for the difference in yield via an adjusted forward price. Otherwise an arbitrage opportunity arises until prices and interest rates align again.
The financial crisis and direct aftermath revealed cracks in the armour of CIP. In a market environment with scarce liquidity and high credit risks in forward markets, dealers were constrained in their ability to profit from what was previously regarded as an almost risk-free arbi¬trage trade. But as conditions in financial markets slowly normalised after the crisis, CIP deviations remained and cross-currency basis never returned to its pre-crisis levels. After narrowing for some time, it started to widen again across most G10 pairs since approximately 2015. Increasingly, FX forward markets seemingly do not reflect what would be expected given the observed interest rate differentials. Figure 1 illustrates these dynamics by depicting the magnitude of G10 cross-currency basis over time for an exemplary three-month tenor.
This document provides an overview of China's managed floating exchange rate regime, its macroeconomic policies, and debates around establishing a new Asian currency. It discusses how China pegs its currency, the renminbi, to the US dollar and intervenes in currency markets to manage appreciation. It also summarizes China's strong economic growth and policies in recent decades, the arguments for establishing a new Asian currency to reduce US dollar dominance, and recommendations to reform exchange rate systems.
The document discusses key aspects of foreign exchange markets including:
- The global foreign exchange market facilitates international trade and investment by determining currency exchange rates. It operates 24/5 from major trading centers like London, New York, Singapore, and Tokyo.
- Primary currencies traded are the US dollar, euro, British pound, Swiss franc, Japanese yen, Australian dollar, Canadian dollar, and New Zealand dollar.
- Exchange rates are determined by the supply and demand of currencies based on exports, imports, capital flows, central bank policies, and speculative trading. Fundamental economic factors like trade balances, inflation rates, productivity, and policies influence exchange rates in the short, medium, and long run.
The Asian Financial Crisis began in Thailand in 1997 and spread to other Asian countries. Countries had fixed exchange rates, large current account deficits, and over-reliance on short-term foreign loans. When the US dollar strengthened, exports became more expensive, growth slowed, and currencies depreciated sharply. This made it difficult to repay foreign debts. The crisis deepened as foreign investors withdrew money and domestic banks refused to refinance loans. Countries turned to the IMF for assistance but austerity measures further damaged economies. The crisis highlighted issues of excessive debt, currency risk, and poor financial regulation.
The document discusses several issues impacting investment decisions including increased market correlations, eurozone debt problems, and economic growth concerns. It also describes Xenfin Capital's foreign exchange trading strategy and how the weakening euro could present opportunities in 2011, though this depends on actions by European authorities and maintaining political coordination.
The document discusses foreign exchange rates and hedging foreign exchange risk. It provides examples of how importers and exporters can use the forward market to hedge risks from currency fluctuations. For example, a US importer paying in British pounds in 6 months can hedge today's spot rate, fixing the exchange rate. If the pound rises, the importer avoids loss. The document also discusses reasons for currency fluctuations and whether the US dollar will maintain its status as a key global currency.
This document discusses mutual fund markets in Japan and India. It provides an overview of what mutual funds are and their advantages. For Japan, it notes that the mutual fund market is the 8th largest in the world but individuals invest less than 5% of their assets in mutual funds. The market grew significantly in 2013 due to inflows into foreign and exchange-traded funds. For India, it states that less than 10% of households invest in mutual funds due to perceived risk and lack of information, though regulations are changing to encourage growth.
Discuss the difference between international finance and domestic finance. Explain the most traded currencies in the world and the reason of their popularity
- Global equity markets declined due to concerns about the withdrawal of monetary stimulus and weak economic data from China. Bond yields rose on signals from the Fed that it may reduce bond purchases if the economy strengthens.
- In India, weak global sentiment and mixed corporate earnings led equity markets to decline, with mid and small cap stocks falling more than large caps. Most sectors declined except for technology. Bond yields were mixed with the 10-year yield falling.
- The Indian rupee weakened against the dollar while the yen and Swiss franc strengthened as safe haven assets amid increased global uncertainty.
This chapter covers finance and accounting topics within an MBA program. It discusses international financial management, including currency exchange rates, foreign direct investment, and hedging foreign exchange risk. It also discusses accounting classifications of costs and management accounting for planning, controlling operations, and decision making. The chapter aims to teach finance and accounting topics together to avoid losing their interconnectedness.
This document discusses the yen carry trade, which involves borrowing low-interest Japanese yen to invest in higher yielding currencies. It provides background on Japan's post-war economic growth and details how structural weaknesses in Japanese banks and its central bank's easy monetary policy contributed to the yen carry trade. The document outlines the mechanics of carry trades and analyzes periods of unwinding in 1998, 2006, and 2007 that were sparked by events like the LTCM crisis and subprime mortgage fears, causing sharp yen appreciation and global market volatility.
The history of international monetary systemSuleyman Ally
The document discusses the history and evolution of international monetary systems from 1816 to present. It describes the gold standard system from 1816-1914, the Bretton Woods system from 1945-1971, and modern exchange rate regimes. The gold standard linked currencies to gold, while the Bretton Woods system established a US dollar-backed system. Countries now choose between fixed exchange rates, where a currency is pegged to another, or floating rates, where the market determines a currency's value.
This document provides BlackRock's outlook for 2015 global markets and economies. It identifies divergence as a key theme, with the US and UK tightening monetary policy while other regions maintain stimulus. Volatility is expected to increase from low levels as valuations are high and investor confidence in monetary policy is stretched. Geopolitical risks also remain. The outlook calls for active risk management and hedging given low potential returns and the diminished ability of bonds to offset equity declines.
This PPT deals with the global capital market which is a network of financial institutions and markets where individuals, companies, and governments can raise and invest capital on an international scale.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
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[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
The Impact of Generative AI and 4th Industrial RevolutionPaolo Maresca
This infographic explores the transformative power of Generative AI, a key driver of the 4th Industrial Revolution. Discover how Generative AI is revolutionizing industries, accelerating innovation, and shaping the future of work.
STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...sameer shah
Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
Scotland is in many ways a microcosm of this challenge. It has become a hub for creative industries, is home to several world-class universities and a thriving community of businesses – strengths that need to be harness and leveraged. But it also has high levels of deprivation, with homelessness reaching a record high and nearly half a million people living in very deep poverty last year. Scotland won’t be truly thriving unless it finds ways to ensure that all its inhabitants benefit from growth and investment. This is the central challenge facing policy makers both in Holyrood and Westminster.
What should a new national economic strategy for Scotland include? What would the pursuit of stronger economic growth mean for local, national and UK-wide policy makers? How will economic change affect the jobs we do, the places we live and the businesses we work for? And what are the prospects for cities like Glasgow, and nations like Scotland, in rising to these challenges?
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
2. OVERALL
• INTRODUCTION
1. Why are interest rates so low in the traditional core
markets of USD and EUR?
2. What makes this “emerging market carry trade” so
different from traditional forms of uncovered interest
arbitrage?
3. Why are many investors shorting the dollars and the
euro?
3. Case Background:
Carry Trade involves borrowing
or selling a financial instrument
with a lower interest rate and then
using it to buy another one with a
higher interest rate.
5. After the global crisis, governments and central banks want massive quantities
of capital to circulate in their financial systems, by keeping the interest rates
near zero.
9. Investors engaged in interest rate arbitrage were only earning from the difference in
interest rates without having to worry about movements in exchange rates. However,
this emerging market carry trade gives opportunity to investors to boost their profit by
benefiting both from interest rate differences and appreciation of emerging markets
currencies.
10. • Constant appreciation of yen in terms of a dollar,
decreasing interest rates in eurozone and U.S made yen
less popular as a funding currency and started a new
trend, which is dollar and euro carry trade.
11. Would you invest in emerging market
currencies?
• Yes, if you believe in constant appreciation of emerging
market currencies, you can earn substantial amount of
money by investing in those currencies.