Exchange rate development in Ethiopia Monetary Development The legal tender currency of Ethiopia was issued on 23 July 1945 by defining the monetary unit as the Ethiopia dollar (E$) with a value of 5.52 grains (equivalent to 0.355745 grams) of fine gold. The linkage with fine gold was in accord with the monetary system established by the Bretton Woods Agreement of 1944. For the five years following the proclamation of the national currency (1945–1950)‚ money supply of the country was determined
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Exchange rate determination of Indian Rupees: (source: MBA Knowledge base) As we know that Forex market for Indian currency is highly volatile where one cannot forecast exchange rate easily‚ there is a mechanism which works behind the determination of exchange rate. One of the most important factors‚ which affect exchange rate‚ is demand and supply of domestic and foreign currency. There are some other factors also‚ which are having major impact on the exchange rate determination. After studying
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British Telecommunications Case Study Foreign Equities Valuation U.S. investors should value foreign equities as a way to diversity their portfolios and reduce risk. Since foreign markets and U.S. markets do not correlate exactly it is likely that if U.S. markets are to perform poorly then foreign markets are likely to be performing better‚ and vice versa. Thus an investor that has a well-diversified portfolio is more likely to obtain a better combination of risk and return than another investor
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Financial Flows International trade has historically played a very significant role in the development of the Australian economy Due to geographical isolation – trade has always represented high proportion of Australia’s economic activity‚ overseas market for Aust.’s primary commodities (agricultural products‚ minerals)‚ imports new technology and items not produced in Aust. (small population size) Only producing 2% of GWP Export 1/5 of Aust. production‚ import 1/5 of GDP Aust. economy has
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12 FOREIGN EXCHANGE EXPOSURE AND RISK MANAGEMENT LEARNING OBJECTIVES 1. Introduction 2. Foreign Exchange Market 3. Market participants 4. Nostro‚ Vostro and Loro Accounts 5. Exchange Rate Determination (a) The Spot Market (b) The Forward Market 6 Exchange Rate Quotation 6.1 6.2 6.3 6.4 American Term and European Term Direct and Indirect Quote Bid‚ Offer and Spread Cross Rates 7. Exchange Rate Forecasting 7.1 Techniques of Exchange Rate Forecasting
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1. Introduction Under the environment of the Global Financial Crisis (GFC)‚ the financial markets had a severe impingement‚ especially the influences to the American financial market. Meanwhile‚ as one of the largest American ‘trading partners’‚ the third largest ‘export market’‚ China offers USA a majority of imports and keeps close trade relation with USA (Morrison‚ 2011‚ pp2-6). It can be seen that the changes of U.S. dollar might affect the Chinese economy. In order to keep sustainable development
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Between 1 bushel of wheat = 4/3 bottles of beer and 1 bushel of wheat = 2 bottles of beer 8. A MNC may gain from its global presence by a. All of the above are potential gains 9. Suppose that you are a US producer of a commodity good competing with foreign producers. You inputs of production are priced in dollars and you sell your output in dollars. If the US currency depreciates against the currencies of our trading partners a. Your competitive position is
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The International Financial Environment Managing the MNC 1. Managers are expected to make decisions that will maximize the stock price * A U.S. view‚ not shared universally. 2. Focus of this text: MNCs whose parents fully own foreign subsidiaries (parent is sole owner of subsidiary.) 3. Finance decisions‚ as always‚ are influenced by other business discipline functions: * Marketing * Management * Accounting and information systems Agency Problems
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In the financial market‚ almost all of companies need to face the currency risk. In order to manage the currency risk‚ companies will use different hedging techniques‚ such as financial and operational hedging techniques. For example‚ money market‚ futures contracts‚ options and forwards contracts are commonly used by firms‚ as well as operational hedging techniques. All of 4 types of financial hedging techniques are short-term hedge. Money market is a part of financial markets for assets involved
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Environmental scan template Table of Contents 1. Introduction 3 2. Filters 3 2.1 Filter example: Type of market 3 2.2 Filter example: Country population 3 3. Template 3 4. Combination of strategy and foreign market conditions 7 5. Further opportunities for action 8 6. Sources 9 Table of Figures Figure 1: Combination of PEST analysis and strategy……………………7 Introduction Scanning the external environment is critically important to ensure the success of firms
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