that due to the currency of Thailand (Thai Baht) is continuously depreciating. 3. How could a decreasing level of national income in Thailand affect Blades? As Thai economy was being affected due to the Asian crises‚ thus the national income of Thai declined‚ and causing the decline demand for imported goods which was manufactured by firms based in Thailand were affected by Asian crises. Due to the decrease in national income the current account of Thai would also tends to decrease. 4. How
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Chapter 4 2. Inflation Effects on Exchange Rates. Assume that the U.S. inflation rate becomes high relative to Canadian inflation. Other things being equal‚ how should this affect the (a) U.S. demand for Canadian dollars‚ (b) supply of Canadian dollars for sale‚ and (c) equilibrium value of the Canadian dollar? ANSWER: Demand for Canadian dollars should increase‚ supply of Canadian dollars for sale should decrease‚ and the Canadian dollar’s value should increase. 3. Interest Rate Effects on
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Chapter 6 Government Influence on Exchange Rates Lecture Outline Exchange Rate Systems Fixed Exchange Rate System Freely Floating Exchange Rate System Managed Float Exchange Rate System Pegged Exchange Rate System Dollarization Classification of Exchange Rate Arrangements A Single European Currency Impact on European Monetary Policy Impact on the Valuation of Businesses in Europe Impact on Financial Flows Impact on Exchange Rate Risk Status Report on the Euro
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Crisis INTRODUCTION The South East Asian financial crisis was a period of financial crisis that gripped much of Asia beginning in July 1997‚ and raised fears of a worldwide economic meltdown due to financial contagion. The crisis started in Thailand with the financial collapse of the Thai Baht caused by the decision of the Thai government to float the Baht‚ cutting its peg to the USD‚ after exhaustive efforts to support it in the face of a severe financial overextension that was in part real estate
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the hedging alternatives for the THB with a scenario under which Blades remains un-hedged. Do you think Blades should hedge or remain un-hedged? If Blades should hedge‚ which hedge is most appropriate? Net Baht to be paid/received in 3 months = 45‚000 pairs × 4‚594 per pair =206‚730‚000 Baht outflows ………………………..18‚000 (pairs) × 3000 (Cost per
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simply if the company(s) can repay the loan and interest charges. 2. Provide a concise summary of the causes of the 1997 Asian financial crisis and the resulting damages. Students are advised to link concepts taught in class to their answer. Strong growth was typical of economies in the South East Asian region in the years leading up to the currency crisis (Mckinnon 1997). Significant increases in stock and land prices in the region fueled foreign investments and lending‚ creating an economic
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I. Intro A. IMF and China B. In this paper‚ I will discuss… II. Body A. China’s monetary system PBOC Open Market Operation RRR B. 1994 “Monetary” Crisis in China Background and causes Phenomenon and effects IMF’s response and action C. 1997 East Asian Crisis Summary of what happened China’s action Build up official reserves Don’t have to borrow from IMF Keep exchange rate competitive D. China’s contemporary monetary policy and regulation Monetary Policy Committee Policies (interest
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MiniCase 2 1. If Blades uses call options to hedge its yen payables‚ should it use the call option with the exercise price of $0.00756 or the call option with the exercise price of $0.00792? Describe the tradeoff. The corporation needs to purchase supplies with foreign currency. To hedge against the possible appreciation of the foreign currency’s value‚ the corporation can purchase a call option. Both options have to pay a premium for the option. The purchase price or exercise price of option
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Intermediate‚ semiprocessed products and finished products. However‚ Thailand and U.S have free trade agreement which lead to the easy way to access to Thai market easily. The kingdom of Thailand is a constitutional monarchy typed government under a parliamentary democratic system. Head of the Thai royal is the current King Bhumibol Adulyadej. Thai government system is modeled similar to the politics of England. However‚ due to the popularity of the former Thailand Prime Minister Thaksin Shinawatra
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and Jeremy Schweiger Rapid growth of the Thai economy in the 1990s led to dramatic changes in food retailing. The traditional food-distribution system—hundreds of thousands of fresh markets that sell fruits‚ vegetables‚ meat‚ and fish‚ along with small mom-and-pop food stores that distribute dry goods—is giving way to modern supermarkets‚ hypermarkets‚ and convenience stores‚ all being developed at an incredible pace. This paper examines the changing Thai food-retailing sector and reports the findings
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