is a currency board system‚ which requires both the stock and flow of the monetary base to be fully backed by foreign reserves. It is the exchange rate system implemented in Hong Kong to stabilize the exchange rate between the Hong Kong dollar (HKD) and the United States dollar (USD). This means that any change in the monetary base is fully matched by a corresponding change in foreign reserves at a fixed exchange rate. (1)(2) The Hong Kong Monetary Authority (HKMA) is Hong Kong ’s currency board
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ASB-1200 Business Study Skills Assignment 2: Individual Report (50%) This report provides an analysis and evaluation of the current and prospective profitability of Austria. The data will be used to advise a US-based multinational company that manufactures and sells its products in a number of other countries. Methods of analysis will include the extensive analysis of valid secondary economic data‚ regarding economic indicators ranging from GDP to population size. Economic indicators are
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have currencies different from each others. It means that their values are not the same‚ and they change every time. So‚ firms have to take into account this problem‚ because it could no be easy at all. The aim of this essay is to understand the problem of exchange rate. In order to answer to this problematic‚ various topics will be analysed. First‚ the concept of exchange rate will be defined to understand well the topic‚ then a summary of the movements of the four most used currencies‚ Dollar
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Bretton Woods Conference The Background During the World War I and World War II the international monetary system is split into several competing currency blocs‚ the fierce trade war between the global recession and nation. In the post-World War II‚ at the end of World War II‚ the U.S. dollar has enjoyed a unique and powerful position in international trade and also because British and American governments for consideration of national interests‚ ideas and design of post-war international monetary
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Until 1997‚ Asia attracted almost half of the total capital inflow into developing countries. The economies of Southeast Asia in particular maintained high interest rates attractive to foreign investors looking for a high rate of return. As a result the region’s economies received a large inflow of money and experienced a dramatic run-up in asset prices. At the same time‚ the regional economies of Thailand‚ Malaysia‚ Indonesia‚ Singapore‚ and South Korea experienced high growth rates‚ 8–12% GDP‚
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Definition: The foreign exchange market can be defined as the collective activity of exchanging currencies i.e. where currencies are bought and sold. The price for the currency is known as the exchange rate. This is one unique market that is not located anywhere but exists on electronic platforms – telephones‚ telex‚ internet and other electronic gadgets. The reality of today is that most convertible currencies offer a 24-hour access for market participants. This unique feature has brought with it
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acquisition. She has to keep in mind Tirstrup has 30 million in cash‚ they earned 163 million from a sale and the priorities are not to issue additional equity of convertible shares. QUESTIONS Question 1: Which of the many debt characteristics – currency‚ maturity‚ cost‚ fixed versus floating rate – do you believe are of the highest priority for Julie and Tirstrup? According to the case study‚ Julie Harberj is assembling a proposal pertaining to the financing requirements for the acquisition of
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effects of changing currency values be included in financial analyses. b. Legal and economic differences be considered in financial decisions. c. Political risk be excluded from multinational corporate financial analyses. d. Statements a and b are correct. e. All of the statements above are correct. Currency depreciation Answer: a Diff: E . If the inflation rate in the United States is greater than the inflation rate in Sweden‚ other things held constant‚ the Swedish currency will a. Appreciate
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Mundell -Fleming Model The Mundell–Fleming model‚ also known as the IS-LM-BP model‚ is an economic model first set forth (independently) by Robert Mundell and Marcus Fleming The model is an extension of the IS-LM model. Whereas the traditional IS-LM Model deals with a closed economy‚ the Mundell–Fleming model describes an open economy. The Mundell-Fleming model portrays the short-run relationship between an economy’s nominal exchange rate‚ interest rate‚ and output (in contrast to the closed-economy
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of a severe financial overextension that was in part real estate driven. At the time‚ Thailand had acquired a burden of foreign debt that made the country effectively bankrupt even before the collapse of its currency. As the crisis spread‚ most of Southeast Asia and Japan saw slumping currencies‚ devalued stock markets and other asset prices‚ and a precipitous rise in private debt. Though there has been general agreement on the existence of a crisis and its consequences‚ the exact reasons of this financial
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