Doing business in emerging economies Essay Example | Topics and Well Written Essays - 3000 words

Doing business in emerging economies - Essay Example sized manufacturing and supply company, catering for target markets within the United Kingdom’s population of approximately 59 million people (UK Census, 2001). The products ranges of perfumes and cosmetics are aimed at the medium to higher earning bracket of males and females. The executive management has been following world trends of local companies entering emerging markets, and the above average returns some of these companies have shown in a relatively short time has spur them to look at the possibility of going global with Madam Cosmetic’s. After a lot of collaboration it was decided to evaluate the opportunity and risks of investing in China. This instigating factors for this decision was the market-reforms that was implemented in China which resulted in the largest reduction of poverty and one of the fastest increases in income levels ever seen. China toady is the sixth-largest and fastest growing economy in the world. In 2004, its $1,65 trillion economy was about one-seventh that of the U.S. China’s rapidly expanding economy and 1,3 billion population for business, and most global companies, are either already involved in the Chinese market or have plans to do so soon (Julian Chen. 2005). China is currently one of the fastest growing economies in the world, driven by excessive government spending and a huge influx of money through the investment of Major International Companies. It is advocated as the country which presents a golden opportunity for businesses to expand and increase their profits. To proof this fact we need to look at the Macroeconomic indicators. According to the Asian Development Bank, China has grown at an average rate of 7.6% over the last five years. This growth was mostly in the private sector and has forced market fundamentals to change to address gaps and inefficiencies of state-owned enterprises. China’s low vulnerability to external shock has helped it to maintain macroeconomic stability despite structural

The Problems in Human Patterns of Consumption Essay

The Problems in Human Patterns of Consumption - Essay Example All the sub-topics will support the main subject matter, which are the human patterns and quantities of consumption. By the end of the research paper, all points taken will be analyzed into a conclusive synthesis. As for now, this will be a comprehensive summary and exposition of the research at hand. This will explain the rationale behind the choice of the research topic and the relevance it has in the real world. The topic focuses on the issues that human patterns of consumption have affected negatively the status of the natural environment. There are serious and grave problems that produce unrestrained human patterns of consumption. Environmental research has indicated that human consumption of natural resources is outpacing the capacity which the Earth can produce. It does not help that while this fact is being overlooked by most of the world’s population, it seems that human needs and wants are taken as more important than environmental concerns. Historically, the problems in human patterns of consumption were more apparent during the age of human modernization and industrialization. As human technological development started to improve, so did the rate of consumption by human beings on the environment. As human populations started to grow by the thousands and millions per day, the increasing demand for human wants and needs are multiplied exponentially. This is manifested through different negative effects on the natural environment. As human populations grew, so did the necessity to expand for shelter become more apparent. Towns would expand to become cities, and cities would become a sprawling metropolis. The materials needed to pursue this task would require so many natural resources to get this done. Many trees would require being lumbered or cut down to construct buildings, houses and fixtures for shelter and commercial use. At the same time, many natural wilderness areas would have to be cleared out to provide  land for human shelter and consumption.

Forex Market Case Study Analysis

Forex Market Case Study Analysis Preface Just as stranger walk on path last arrive at their destination; project work is like a path after walking in which students can gain experience knowledge that can be stepping stone towards their success. It is such a work that enhances each every individual working capacity knowledge. The Importance of Thesis is that it is blending of both theoretical practical knowledge. Through the thesis, I got a golden change to have guidance under professionals senior executives which can definitely be a platform of establishing themselves. During my thesis work I visited AMA Library, Gujarat Chamber of Commerce and SBI which helped us a lot to gain information about Forex derivatives. This opportunist of thesis provided to me was not only a platform to develop enhance my appetite of learning but also served a fusion of the theoretical concept their practical application in corporate world. INTRODUCTION: To make a profit from the forex market of International trade you have a grip on mainly five key factors that affects a currency value. When making our trades we analyze five key factors which are as follows. Interest Rates Economic Growth Geo-Politics Trade and Capital Flows Merger and Acquisition Activity Interest Rates: Interest income and capital appreciation these two methods we can use to make profit from different in terms of countries interest rates. Interest Income. Every currency in the world comes attached with an interest rate that is set by its countrys central bank. All things being equal, you should always Buy currencies from countries with high-interest rates and Finance these purchases with currency from countries with low-interest rates. For example, as of the fall of 2006, interest rates in the United States stood at 5.25%, while rates in Japan were set at .25%. You could have taken advantage of this rate difference by borrowing a large sum of Japanese yen, exchanging it for US dollars and using the US dollars to purchase bonds or cds at the US 5.25% rate. In other words, you could have borrowed money at .25%, lent it out at 5.25%, and made a 5% return.Or you could save yourself all the hassle of becoming a money lender by simply trading the currency pairto affect the same transaction. Capital appreciation. Asa countrys interest rate rises, the value of the countrys currency also tends to rise this phenomenon gives you a chance to profit from your currencys increased value, or capital appreciation. In the case of the USD/JPY spread in 2005 and 2006, as the US interest rates stayed higher than Japans, the dollar continued to increase in value. Investors who traded yen for dollars gained from interest income as well as the US dollars capital appreciation. Economic Growth. Economic Growth is next factor when predicting a countrys currency movements.The stronger the economy, the greater the possibility that the central bank will raise its interest rates in order to the growth of inflation.Andthe higher a countrys interest rates, the bigger the likelihood those foreign investors will invest in a countrys financial markets.More foreign investors mean a greater demand for the countrys currency.A greater demand results in an increase in a currencys value. Hence economic growth inspires higher interest rates inspires more foreign investment inspires greater currency demand which inspires an increase in the currencys value. Geo-Politics. The currency market is the only market in the world that can be successfully traded on political news as well as economic releases.Because currencies representcountries rather than companies and any disturbance to the political landscape will oftentimes affect the direction in which the exchange rate moves. The key to understanding speculative behavior with respect to any geopolitical unrest is that speculators run first and ask questions later.In other words, whenever investors fear any threat to their capital, they will quickly retreat to the sidelines until they are certain that the political risk has disappeared.Therefore, the general rule of thumb in the currency market is thatpolitics almost always trumps economics. Trade and Capital Flows Before ever making a final prediction regarding the movement (or trend) of a particular currency you should determine whether or not the currency is dependent on its countrys capital or trade flow. Capital flow refers to the amount of investment a country receives from international sources. Trade flow is the income resulting from trade. Some countries can be very dependent their capital flow, while other countries are extremely sensitive to trade flows. Mergers and Acquisitions Merger and acquisition activity is the least important factor in determining the long-term direction of currencies. It can be the most powerful force in stagingnear-term currency moves.Merger and acquisition activity occurs when a company from one economic region wants to make a transnational transaction and buy a corporation from another country. For example, a European company wants to buy a Canadian asset for $20 billion, it would have to go into the currency market and acquire the currency to affect this transaction.Typically, these deals are not price sensitive, buttime sensitivebecause the acquirer may have a date by which the transaction is to be completed. Because of this underlying dynamic, merger and acquisition flow can exert a very strong temporary force on FX trading, sometimes skewing the natural course of currency flow for days or weeks. OBJECTIVE: Main Objective is for getting in depth knowledge of my topic. To critically analyze the Forex market of International trade. To analyze the five key factors that moves the Forex market and how to make profit out of them. To analyze the present data and forecasting a future movement of Forex market. METHODOLOGHY: * Introduction of the topic in detail. * For predict market movement I am using two methods like fundamental analysis and technical analysis. Technical analysis includes Candlestick Charts and Moving Averages (Simple and Exponential) SOURCES: Primary source  · Taking interview of the expertise in the Forex market. Secondary source  · Use Books, Magazines, Newspapers, Research papers and Internet as secondary sources LIMITATIONS:  · I have to follow only these five factors for move the Forex market.  · Interview is the only primary research in the Forex market.  · Inflation is the main factor which moves the Forex market but which is not included in the five factors.  · Merger and Acquisition is the least important factor. CHAPTER 1: INTRODUCTION OF FOREIGN EXCHANGE Foreign Exchange is the method or process of conversion/converting one currency into another currency. Currency becomes money and legal tender for a country. But for a foreign country it becomes the value as a commodity. Since the commodity has a value its relation with the other currency determines the exchange value of one currency with the other. It is just the game of supply and demand. For example, the US dollar in USA is the currency in USA but for India it is just like a commodity which has a value which varies according to demand and supply. Foreign exchange is one of the economic activity which deals with the means and methods by which rights to wealth expressed in terms of the currency of one country are converted into rights to wealth in terms of the current of another country. It involves the investigation of the method which exchanges the currency of one country for that of another. Foreign exchange can also be defined as the means of payment in which currencies are converted into each other and by which international transfers are made also the activity of transacting business in further means. Most countries of the world have their own currencies. The US has its dollar, France its franc, Brazil its cruziero and India has its Rupee. Trade between the countries involves the exchange of different currencies. The foreign exchange market is the market in which currencies are bought and sold against each other. It is the largest market in the world. Transactions conducted in foreign exchange markets determine the rates at which currencies are exchanged for one another, which in turn determine the cost of purchasing foreign goods financial assets. The most recent, bank of international settlement survey stated that over $900 billion were traded worldwide each day. During peak volume period, the figure can reach upward of US $2 trillion per day. The corresponding to 160 times the daily volume of NYSE. CHAPTER 2: ORIGIN OF THE FOREX MARKET The FOREX trading traces its history to centuries ago. Different currencies and the need of exchange them had existed since the Babylonians. They are credited with the first use of paper notes and receipts. In that time the value of goods were expressed in terms of other goods which were called as Barter system. The obvious limitations of such a system encouraged establishing more generally accepted mediums of exchange. It was important that a common base of value could be established. In some economies, items such as teeth, feathers even stones served this purpose, but soon various metals, in particular gold and silver, established themselves as an accepted means of payment as well as a reliable storage of value. Trade was carried among people of Africa, Asia etc through this system. Coins were initially minted from the preferred metal and in stable political regimes, the introduction of a paper form of governmental I.O.U. during the middle Ages also gained acceptance. This type of I.O.U. was introduced more successfully through force than through persuasion and is now the basis of todays modern currencies. Before the First World War, most Central banks supported their currencies with convertibility to gold. However, the gold exchange standard had its weaknesses of boom-bust patterns. As an economy strengthened, it would import a great deal from out of the country until it ran down its gold reserves required to support its money. As a result, the money supply would diminish, interest rates escalate and economic activity slowed to the point of recession. Ultimately, prices of commodities had hit bottom and it appearing attractive to other nations who would sprint into buying fury that injected the economy with gold until it increased its money supply, drive down interest rates and restore wealth into the economy. However, for this type of gold exchange, there was not necessarily a Centrals bank need for full coverage of the governments currency reserves. This did not occur very often, however when a group mindset fostered this disastrous notion of converting back to gold in mass, panic resulted in so-called Run on banks. The combination of a greater supply of paper money without the gold to cover led to devastating inflation and resulting political instability. The Great Depression and the removal of the gold standard in 1931 created a serious lull in FOREX market activity. From 1931 until 1973, the FOREX market went through a series of changes. These changes greatly affected the global economies at the time and speculation in the FOREX markets during these times was little. Inorder to protect local national interests, increased foreign exchange controls were introduced to prevent market forces from punishing monetary irresponsibility. Nearthe end of World War II, the Bretton Woods agreement was reached on the initiative of the USA in July 1944. The conference held in Bretton Woods, New Hampshire rejected John Maynard Keynes suggestion for a new world reserve currency in favor of a system built on the US Dollar. International institutions such as the IMF, The World Bank and GATT were created in the same period as the emerging victors of WWII searched for a way to avoid the destabilizing monetary crises leading to the war. The Bretton Woods agreement resulted in a system of fixed exchange rates that reinstated The Gold Standard partly, fixing the USD at $35.00 per ounce of Gold and fixing the other main currencies to the dollar, initially intended to be on a permanent basis. TheBretton Woods system came under increasing pressure as national economies moved in different directions during the 1960s. A number of realignments held the system alive for a long time but eventually Bretton Woods collapsed in the early 1970s following president Nixons suspension of the gold convertibility in August 1971. The dollar was not any longer suited as the sole international currency at a time when it was under severe pressure from increasing US budget and trade deficits. Thelast few decades have seen foreign exchange trading develop into the worlds largest global market. Restrictions on capital flows have been removed in most countries, leaving the market forces free to adjustforeign exchange ratesaccording to their perceived values. TheEuropean Economic Community introduced a new system of fixed exchange rates in 1979, the European Monetary System. The quest continued in Europe for currency stability with the 1991 signing of The Maastricht treaty. This was to not only fix exchange rates but also actually replace many of them with the Euro in 2002. London was, and remains the principal offshore market. In the 1980s, it became the key center in the Eurodollar market when British banks began lending dollars as an alternative to pounds in order to maintain their leading position in global finance. InAsia, the lack of sustainability of fixedforeign exchange rateshas gained new relevance with the events in South East Asia in the latter part of 1997, where currency after currency was devalued against the US dollar, leaving other fixed exchange rates in particular in South America also looking very vulnerable. Whilecommercial companies have had to face a much more volatile currency environment in recent years, investors and financial institutions have discovered a new playground. The FOREX exchange market initially worked under the central banks and the governmental institutions but later on it accommodated the various institutions. At present it also includes the dot com booms and the World Wide Web. The size of the FOREX market now dwarfs any other investment market. Theforeign exchange marketis the largest financial market in the world. Approximately 1.9 trillion dollars are traded daily in theforeign exchange market. It is estimated that more than USD 1,200 Billion are traded every day. It can be said easily that FOREX market is a lucrative opportunity for the modern day savvy investor SHORT INFO OF FOREX The history of FOREX trading was traced centuries ago. Different countries need different currencies and the need of exchange them had existed since the Babylonians. It is said that Babylonians were the first one who used paper notes and receipts. During those days, goods were exchanged for another goods based on the value of both the goods, which was known as barter system. But this system had some limitations and this lead to encourage establishing more generally accepted medium of exchange. It was also important that a common base of value could be established. In some economies, items such as teeth, feathers even stones served this purpose, but soon various metals, in particular gold and silver, established themselves as an accepted means of payment as well as a reliable storage of value. Trade was carried among people of Africa, Asia etc through this system. Coinswere initially minted from the preferred metal and in stable political regimes, the introduction of a paper form of governmental I.O.U. during the middle Ages also gained acceptance. This type of I.O.U. was introduced more successfully through force than through persuasion and is now the basis of todays modern currencies. Beforethe First World War, most Central banks supported their currencies with convertibility to gold. However, the gold exchange standard had its weaknesses of boom-bust patterns. As an economy strengthened, it would import a great deal from out of the country until it ran down its gold reserves required to support its money. As a result, the money supply would diminish, interest rates escalate and economic activity slowed to the point of recession. Ultimately, prices of commodities had hit bottom and it appearing attractive to other nations who would sprint into buying fury that injected the economy with gold until it increased its money supply, drive down interest rates and restore wealth into the economy. However, for this type of gold exchange, there was not necessarily a Centrals bank need for full coverage of the governments currency reserves. This did not occur very often, however when a group mindset fostered this disastrous notion of converting back to gold in mass, panic resulted in so-called Run on banks. The combination of a greater supply of paper money without the gold to cover led to devastating inflation and resulting political instability. The Great Depression and the removal of the gold standard in 1931 created a serious lull in FOREX market activity. From 1931 until 1973, the FOREX market went through a series of changes. These changes greatly affected the global economies at the time and speculation in the FOREX markets during these times was little. Inorder to protect local national interests, increased foreign exchange controls were introduced to prevent market forces from punishing monetary irresponsibility. Nearthe end of World War II, the Bretton Woods agreement was reached on the initiative of the USA in July 1944. The conference held in Bretton Woods, New Hampshire rejected John Maynard Keynes suggestion for a new world reserve currency in favor of a system built on the US Dollar. International institutions such as the IMF, The World Bank and GATT were created in the same period as the emerging victors of WWII searched for a way to avoid the destabilizing monetary crises leading to the war. The Bretton Woods agreement resulted in a system of fixed exchange rates that reinstated The Gold Standard partly, fixing the USD at $35.00 per ounce of Gold and fixing the other main currencies to the dollar, initially intended to be on a permanent basis. TheBretton Woods system came under increasing pressure as national economies moved in different directions during the 1960s. A number of realignments held the system alive for a long time but eventually Bretton Woods collapsed in the early 1970s following president Nixons suspension of the gold convertibility in August 1971. The dollar was not any longer suited as the sole international currency at a time when it was under severe pressure from increasing US budget and trade deficits. Thelast few decades have seen foreign exchange trading develop into the worlds largest global market. Restrictions on capital flows have been removed in most countries, leaving the market forces free to adjustforeign exchange ratesaccording to their perceived values. TheEuropean Economic Community introduced a new system of fixed exchange rates in 1979, the European Monetary System. The quest continued in Europe for currency stability with the 1991 signing of The Maastricht treaty. This was to not only fix exchange rates but also actually replace many of them with the Euro in 2002. London was, and remains the principal offshore market. In the 1980s, it became the key center in the Eurodollar market when British banks began lending dollars as an alternative to pounds in order to maintain their leading position in global finance. InAsia, the lack of sustainability of fixedforeign exchange rateshas gained new relevance with the events in South East Asia in the latter part of 1997, where currency after currency was devalued against the US dollar, leaving other fixed exchange rates in particular in South America also looking very vulnerable. Whilecommercial companies have had to face a much more volatile currency environment in recent years, investors and financial institutions have discovered a new playground. The FOREX exchange market initially worked under the central banks and the governmental institutions but later on it accommodated the various institutions. At present it also includes the dot com booms and the World Wide Web. The size of the FOREX market now dwarfs any other investment market. Theforeign exchange marketis the largest financial market in the world. Approximately 1.9 trillion dollars are traded daily in theforeign exchange market. It is estimated that more than USD 1,200 Billion are traded every day. It can be said easily that FOREX market is a lucrative opportunity for the modern day savvy investor CHAPTER 3: METHODS OF QUOTING EXCHANGE RATES There are two methods of quoting exchange rates. Direct method: For change in exchange rate if foreign currency is kept constant and home currency is kept variable, then the rates are stated be expressed in ‘Direct Method E.g. US $1 = Rs. 45.50. Indirect method: For change in exchange rate if home currency is kept constant and foreign currency is kept variable, then the rates are stated be expressed in ‘Indirect Method. E.g. Rs. 100 = US $ 2.5116 With the effect from August 2, 1993, all the exchange rates are quoted in direct method, i.e. US $1 = Rs. 45.50 GBP1 = Rs. 79.82 Method of Quotation In the Forex market there are two rates like one is for buying and one is for selling rates. This helps in eliminating the risk of being given bad rates i.e. if a party comes to know what the other party intends to do i.e., buy or sell, the former can take the latter for a ride. There are two parties in an exchange deal of currencies. To begin the deal one party asks for quote from another party and the other party quotes a rate. The party asking for a quote is known as ‘Asking party and the party giving quote is known as ‘Quoting party The advantages of two way quote. Ø It automatically ensures alignment of rates with market rates. Ø The market constantly makes available price for buyers and sellers. Ø Two-way price limits the profit margin of the quoting bank and comparison of one quote with another quote can be done immediately. Ø It is not necessary for any player in the market to show whether he intends to buy or sell foreign currency but this ensures that the quoting bank cannot take advantage by manipulating the prices. Ø Two-way quotes lend depth and liquidity to the market and which is very essential for efficient. Ø In two-way quotes for the first rate is the rate for buying and another rate is for selling. We should understand here that in India the banks which are authorized dealers, always quote rates. So the rates quote buying and selling is for banks will buy the dollars from him so while calculation the first rate will be used which is a buying rate, as the bank is buying the dollars from the exporter. Ø The same case will happen inversely with the importer, as he will buy the dollars from the banks and bank will sell dollars to importer. BASE CURRENCY Even if a foreign currency can be bought and sold in the same way as a commodity but theyre use as a minor difference in buying/selling of currency aid commodities. Unlike in case of commodities, in case of foreign currencies two currencies are involved so, it is necessary to know which the currency to be bought and sold is and the same one is known as ‘Base Currency. BID OFFER RATES The buying and selling rates are also referred to as the bid and offered rates. In the dollar exchange rates referred to above, namely, $ 1.6288/96, the quoting bank is offering (selling) dollars at $ 1.6288 per pound while bidding for them (buying) at $ 1.6296. So in this quotation the bid rate for dollars is $ 1.6296 while the offered rate is $ 1.6288. The bid rate for one currency is automatically the offered rate for the other. In the above example, the bid rate for dollars $ 1.6296, is also the offered rate of pounds. CROSS RATE CALCULATION US Dollar is the most trading currency in the forex market. In other words one support of most exchange trades is the US currency so margins between bid and offered rates are lowest quotations if the US dollar. The margins tend to widen for cross rates, as the following calculation would show. Consider the following structure: GBP 1.00 = USD 1.6288/96 EUR 1.00 = USD 1.1276/80 In this rate structure, we have to calculate the bid and offered rates for the euro in terms of pounds. Let us see how the offered (selling) rate for euro can be calculated. Starting with the pound, you will have to buy US dollars at the offered rate of USD 1.6288 and buy Euros against the dollar at the offered rate for euro at USD 1.1280. The offered rate for the euro in terms of GBP, therefore, becomes EUR (1.6288*1.1280), i.e. EUR 1.4441 per GBP, or more conventionally, GBP 0.6925 per euro. Similarly, the bid rate the euro can be seen to be EUR 1.4454 per GBP (or GBP 0.6918 per euro). Thus, the quotation becomes GBP 1.00 = EUR 1.4441/54. It will be eagerly noticed that in percentage terms the difference between the bid and offered rate is higher for the EUR: pound rate as compared to dollar: EUR or pound: dollar rates. CHAPTER 4: ADVANTAGES OF FOREX MARKET The Forex market is by far the largest and most liquid in the world but also day traders have up to now focused on looking for profits in mainly stock and futures markets. This is mainly due to the restrictive nature of bank-offered forex trading services. There are Advanced Currency Markets (ACM) offers both online and traditional phone forex-trading services to the small investor with minimum account opening values starting at 5000 USD. There are many advantages to trading spot foreign exchange as opposed to trading stocks and futures. These are the some advantages as under. Commissions: ACM offers foreign exchange trading commission free. This is in sharp contrast to (once again) what stock and futures brokers offer. A stock trade can cost anywhere between USD 5 and 30 per trade with online brokers and typically up to USD 150 with full service brokers. Futures brokers can charge commissions anywhere between USD 10 and 30 on a round turn basis. Margins requirements: ACM offers a foreign exchange trading with a 1% margin. In laymans terms that means a trader can control a position of a value of USD 1000000 with a mere USD 10000 in his account. By comparison, futures margins are not only constantly changing but are also often quite sizeable. Stocks are generally traded on a non-margined basis and when they are, it can be as restrictive as 50% or so. 24 hour market: Foreign exchange market trading occurs over a 24 hour period picking up in Asia around 24:00 CET Sunday evening and coming to an end in the United States on Friday around 23:00 CET. Although ECNs (electronic communications networks) exist for stock markets and futures markets (like Globex) that supply after hours trading, liquidity is often low and prices offered can often be uncompetitive. No Limit up / limit down: Futures markets contain certain constraints that limit the number and type of transactions a trader can make under certain price conditions. When the price of a certain currency rises or falls beyond a certain pre-determined daily level traders are restricted from initiating new positions and are limited only to liquidating existing positions if they so desire. The controlling of daily price volatility is the main mechanism but in effect since the futures currency market follows the spot market anyway the following day the futures market may undergo what is called a gap or we can say also in other words the futures price will re-adjust to the spot price the next day. In the OTC market no such trading constraints exist permitting the trader to truly implement his trading strategy to the fullest extent. Since a trader can protect his position from large unexpected price movements with stop-loss orders the high volatility in the spot market can be fully controlled. Sell before you buy: Equity brokers offer very restrictive short-selling margin requirements to customers. This means that a customer does not possess the liquidity to be able to sell stock before he buys it. When initiating a selling or buying position in the spot market a trader has exactly the same capacity in margin wise. In spot trading when you are selling one currency you are necessarily buying another. CHAPTER 5: FOREX EXCHANGE RISK The Risk Management Guidelines are primarily an accent of some good and prudent practices in exposure management. They have to be understood and slowly internalized and customized so that they yield positive reimbursement to the company over time. Any business is open to risks from movements in competitors prices, raw material prices, competitors cost of capital, foreign exchange rates and interest rates, all of which need to be (ideally) managed. Forex Risk Everywhere in the world risk is attached. Without risk there is no gain. Also the FOREX is not risk-free. Like if you are trading with substantial sums of money and there is always a possibility that trades will go against you.Also there are several trading tools so that can minimize your risk and with caution and above all education the FOREX trader can learn how to trade profitably and while minimizing losses. Risks Assuming you are dealing with a reputable broker and there are still risks to FOREX trading. Transactions are subject to unexpected rate changes, volatile markets and political events. Exchange Rate Risk: Exchange rate risk which refers to the fluctuations in the currency prices over a long trading period. The Prices can fall rapidly which are resulting in substantial losses unless and until stop loss orders are used when trading FOREX. And so stop loss orders specify that the open position should be closed if currency prices pass a predetermined level. Stop loss orders can be used in conjunction with limit orders to automate FOREX trading limit orders specify an open position should be closed at a specified profit target. Interest Rate Risk: It can result from discrepancies between the interest rates in the two countries which represented by the currency pair in a FOREX quote. This discrepancy can result in variations from the expected profit or loss of a particular FOREX transaction. Credit Risk: It is the possibility that when the deal is closed one party in a FOREX transaction may not honor their debt and this may happen when a bank or financial institution declares insolvency. The Credit risk is minimized by dealing on regulated exchanges which require members to be monitored for credit worthiness. Country Risk: Country risk is connected with governments that may become involved in foreign exchange markets by limiting the flow of currency. There is more country risk associated with exotic currencies than with major currencies that allow the free trading of their currency. Limiting Risk in your FOREX currency trading system FOREX trading can be very risky but there are ways to limit your risk and financial exposure. Every FOREX trader should have a trading strategy for knowing when to enter and when to ex Forex Market Case Study Analysis Forex Market Case Study Analysis Preface Just as stranger walk on path last arrive at their destination; project work is like a path after walking in which students can gain experience knowledge that can be stepping stone towards their success. It is such a work that enhances each every individual working capacity knowledge. The Importance of Thesis is that it is blending of both theoretical practical knowledge. Through the thesis, I got a golden change to have guidance under professionals senior executives which can definitely be a platform of establishing themselves. During my thesis work I visited AMA Library, Gujarat Chamber of Commerce and SBI which helped us a lot to gain information about Forex derivatives. This opportunist of thesis provided to me was not only a platform to develop enhance my appetite of learning but also served a fusion of the theoretical concept their practical application in corporate world. INTRODUCTION: To make a profit from the forex market of International trade you have a grip on mainly five key factors that affects a currency value. When making our trades we analyze five key factors which are as follows. Interest Rates Economic Growth Geo-Politics Trade and Capital Flows Merger and Acquisition Activity Interest Rates: Interest income and capital appreciation these two methods we can use to make profit from different in terms of countries interest rates. Interest Income. Every currency in the world comes attached with an interest rate that is set by its countrys central bank. All things being equal, you should always Buy currencies from countries with high-interest rates and Finance these purchases with currency from countries with low-interest rates. For example, as of the fall of 2006, interest rates in the United States stood at 5.25%, while rates in Japan were set at .25%. You could have taken advantage of this rate difference by borrowing a large sum of Japanese yen, exchanging it for US dollars and using the US dollars to purchase bonds or cds at the US 5.25% rate. In other words, you could have borrowed money at .25%, lent it out at 5.25%, and made a 5% return.Or you could save yourself all the hassle of becoming a money lender by simply trading the currency pairto affect the same transaction. Capital appreciation. Asa countrys interest rate rises, the value of the countrys currency also tends to rise this phenomenon gives you a chance to profit from your currencys increased value, or capital appreciation. In the case of the USD/JPY spread in 2005 and 2006, as the US interest rates stayed higher than Japans, the dollar continued to increase in value. Investors who traded yen for dollars gained from interest income as well as the US dollars capital appreciation. Economic Growth. Economic Growth is next factor when predicting a countrys currency movements.The stronger the economy, the greater the possibility that the central bank will raise its interest rates in order to the growth of inflation.Andthe higher a countrys interest rates, the bigger the likelihood those foreign investors will invest in a countrys financial markets.More foreign investors mean a greater demand for the countrys currency.A greater demand results in an increase in a currencys value. Hence economic growth inspires higher interest rates inspires more foreign investment inspires greater currency demand which inspires an increase in the currencys value. Geo-Politics. The currency market is the only market in the world that can be successfully traded on political news as well as economic releases.Because currencies representcountries rather than companies and any disturbance to the political landscape will oftentimes affect the direction in which the exchange rate moves. The key to understanding speculative behavior with respect to any geopolitical unrest is that speculators run first and ask questions later.In other words, whenever investors fear any threat to their capital, they will quickly retreat to the sidelines until they are certain that the political risk has disappeared.Therefore, the general rule of thumb in the currency market is thatpolitics almost always trumps economics. Trade and Capital Flows Before ever making a final prediction regarding the movement (or trend) of a particular currency you should determine whether or not the currency is dependent on its countrys capital or trade flow. Capital flow refers to the amount of investment a country receives from international sources. Trade flow is the income resulting from trade. Some countries can be very dependent their capital flow, while other countries are extremely sensitive to trade flows. Mergers and Acquisitions Merger and acquisition activity is the least important factor in determining the long-term direction of currencies. It can be the most powerful force in stagingnear-term currency moves.Merger and acquisition activity occurs when a company from one economic region wants to make a transnational transaction and buy a corporation from another country. For example, a European company wants to buy a Canadian asset for $20 billion, it would have to go into the currency market and acquire the currency to affect this transaction.Typically, these deals are not price sensitive, buttime sensitivebecause the acquirer may have a date by which the transaction is to be completed. Because of this underlying dynamic, merger and acquisition flow can exert a very strong temporary force on FX trading, sometimes skewing the natural course of currency flow for days or weeks. OBJECTIVE: Main Objective is for getting in depth knowledge of my topic. To critically analyze the Forex market of International trade. To analyze the five key factors that moves the Forex market and how to make profit out of them. To analyze the present data and forecasting a future movement of Forex market. METHODOLOGHY: * Introduction of the topic in detail. * For predict market movement I am using two methods like fundamental analysis and technical analysis. Technical analysis includes Candlestick Charts and Moving Averages (Simple and Exponential) SOURCES: Primary source  · Taking interview of the expertise in the Forex market. Secondary source  · Use Books, Magazines, Newspapers, Research papers and Internet as secondary sources LIMITATIONS:  · I have to follow only these five factors for move the Forex market.  · Interview is the only primary research in the Forex market.  · Inflation is the main factor which moves the Forex market but which is not included in the five factors.  · Merger and Acquisition is the least important factor. CHAPTER 1: INTRODUCTION OF FOREIGN EXCHANGE Foreign Exchange is the method or process of conversion/converting one currency into another currency. Currency becomes money and legal tender for a country. But for a foreign country it becomes the value as a commodity. Since the commodity has a value its relation with the other currency determines the exchange value of one currency with the other. It is just the game of supply and demand. For example, the US dollar in USA is the currency in USA but for India it is just like a commodity which has a value which varies according to demand and supply. Foreign exchange is one of the economic activity which deals with the means and methods by which rights to wealth expressed in terms of the currency of one country are converted into rights to wealth in terms of the current of another country. It involves the investigation of the method which exchanges the currency of one country for that of another. Foreign exchange can also be defined as the means of payment in which currencies are converted into each other and by which international transfers are made also the activity of transacting business in further means. Most countries of the world have their own currencies. The US has its dollar, France its franc, Brazil its cruziero and India has its Rupee. Trade between the countries involves the exchange of different currencies. The foreign exchange market is the market in which currencies are bought and sold against each other. It is the largest market in the world. Transactions conducted in foreign exchange markets determine the rates at which currencies are exchanged for one another, which in turn determine the cost of purchasing foreign goods financial assets. The most recent, bank of international settlement survey stated that over $900 billion were traded worldwide each day. During peak volume period, the figure can reach upward of US $2 trillion per day. The corresponding to 160 times the daily volume of NYSE. CHAPTER 2: ORIGIN OF THE FOREX MARKET The FOREX trading traces its history to centuries ago. Different currencies and the need of exchange them had existed since the Babylonians. They are credited with the first use of paper notes and receipts. In that time the value of goods were expressed in terms of other goods which were called as Barter system. The obvious limitations of such a system encouraged establishing more generally accepted mediums of exchange. It was important that a common base of value could be established. In some economies, items such as teeth, feathers even stones served this purpose, but soon various metals, in particular gold and silver, established themselves as an accepted means of payment as well as a reliable storage of value. Trade was carried among people of Africa, Asia etc through this system. Coins were initially minted from the preferred metal and in stable political regimes, the introduction of a paper form of governmental I.O.U. during the middle Ages also gained acceptance. This type of I.O.U. was introduced more successfully through force than through persuasion and is now the basis of todays modern currencies. Before the First World War, most Central banks supported their currencies with convertibility to gold. However, the gold exchange standard had its weaknesses of boom-bust patterns. As an economy strengthened, it would import a great deal from out of the country until it ran down its gold reserves required to support its money. As a result, the money supply would diminish, interest rates escalate and economic activity slowed to the point of recession. Ultimately, prices of commodities had hit bottom and it appearing attractive to other nations who would sprint into buying fury that injected the economy with gold until it increased its money supply, drive down interest rates and restore wealth into the economy. However, for this type of gold exchange, there was not necessarily a Centrals bank need for full coverage of the governments currency reserves. This did not occur very often, however when a group mindset fostered this disastrous notion of converting back to gold in mass, panic resulted in so-called Run on banks. The combination of a greater supply of paper money without the gold to cover led to devastating inflation and resulting political instability. The Great Depression and the removal of the gold standard in 1931 created a serious lull in FOREX market activity. From 1931 until 1973, the FOREX market went through a series of changes. These changes greatly affected the global economies at the time and speculation in the FOREX markets during these times was little. Inorder to protect local national interests, increased foreign exchange controls were introduced to prevent market forces from punishing monetary irresponsibility. Nearthe end of World War II, the Bretton Woods agreement was reached on the initiative of the USA in July 1944. The conference held in Bretton Woods, New Hampshire rejected John Maynard Keynes suggestion for a new world reserve currency in favor of a system built on the US Dollar. International institutions such as the IMF, The World Bank and GATT were created in the same period as the emerging victors of WWII searched for a way to avoid the destabilizing monetary crises leading to the war. The Bretton Woods agreement resulted in a system of fixed exchange rates that reinstated The Gold Standard partly, fixing the USD at $35.00 per ounce of Gold and fixing the other main currencies to the dollar, initially intended to be on a permanent basis. TheBretton Woods system came under increasing pressure as national economies moved in different directions during the 1960s. A number of realignments held the system alive for a long time but eventually Bretton Woods collapsed in the early 1970s following president Nixons suspension of the gold convertibility in August 1971. The dollar was not any longer suited as the sole international currency at a time when it was under severe pressure from increasing US budget and trade deficits. Thelast few decades have seen foreign exchange trading develop into the worlds largest global market. Restrictions on capital flows have been removed in most countries, leaving the market forces free to adjustforeign exchange ratesaccording to their perceived values. TheEuropean Economic Community introduced a new system of fixed exchange rates in 1979, the European Monetary System. The quest continued in Europe for currency stability with the 1991 signing of The Maastricht treaty. This was to not only fix exchange rates but also actually replace many of them with the Euro in 2002. London was, and remains the principal offshore market. In the 1980s, it became the key center in the Eurodollar market when British banks began lending dollars as an alternative to pounds in order to maintain their leading position in global finance. InAsia, the lack of sustainability of fixedforeign exchange rateshas gained new relevance with the events in South East Asia in the latter part of 1997, where currency after currency was devalued against the US dollar, leaving other fixed exchange rates in particular in South America also looking very vulnerable. Whilecommercial companies have had to face a much more volatile currency environment in recent years, investors and financial institutions have discovered a new playground. The FOREX exchange market initially worked under the central banks and the governmental institutions but later on it accommodated the various institutions. At present it also includes the dot com booms and the World Wide Web. The size of the FOREX market now dwarfs any other investment market. Theforeign exchange marketis the largest financial market in the world. Approximately 1.9 trillion dollars are traded daily in theforeign exchange market. It is estimated that more than USD 1,200 Billion are traded every day. It can be said easily that FOREX market is a lucrative opportunity for the modern day savvy investor SHORT INFO OF FOREX The history of FOREX trading was traced centuries ago. Different countries need different currencies and the need of exchange them had existed since the Babylonians. It is said that Babylonians were the first one who used paper notes and receipts. During those days, goods were exchanged for another goods based on the value of both the goods, which was known as barter system. But this system had some limitations and this lead to encourage establishing more generally accepted medium of exchange. It was also important that a common base of value could be established. In some economies, items such as teeth, feathers even stones served this purpose, but soon various metals, in particular gold and silver, established themselves as an accepted means of payment as well as a reliable storage of value. Trade was carried among people of Africa, Asia etc through this system. Coinswere initially minted from the preferred metal and in stable political regimes, the introduction of a paper form of governmental I.O.U. during the middle Ages also gained acceptance. This type of I.O.U. was introduced more successfully through force than through persuasion and is now the basis of todays modern currencies. Beforethe First World War, most Central banks supported their currencies with convertibility to gold. However, the gold exchange standard had its weaknesses of boom-bust patterns. As an economy strengthened, it would import a great deal from out of the country until it ran down its gold reserves required to support its money. As a result, the money supply would diminish, interest rates escalate and economic activity slowed to the point of recession. Ultimately, prices of commodities had hit bottom and it appearing attractive to other nations who would sprint into buying fury that injected the economy with gold until it increased its money supply, drive down interest rates and restore wealth into the economy. However, for this type of gold exchange, there was not necessarily a Centrals bank need for full coverage of the governments currency reserves. This did not occur very often, however when a group mindset fostered this disastrous notion of converting back to gold in mass, panic resulted in so-called Run on banks. The combination of a greater supply of paper money without the gold to cover led to devastating inflation and resulting political instability. The Great Depression and the removal of the gold standard in 1931 created a serious lull in FOREX market activity. From 1931 until 1973, the FOREX market went through a series of changes. These changes greatly affected the global economies at the time and speculation in the FOREX markets during these times was little. Inorder to protect local national interests, increased foreign exchange controls were introduced to prevent market forces from punishing monetary irresponsibility. Nearthe end of World War II, the Bretton Woods agreement was reached on the initiative of the USA in July 1944. The conference held in Bretton Woods, New Hampshire rejected John Maynard Keynes suggestion for a new world reserve currency in favor of a system built on the US Dollar. International institutions such as the IMF, The World Bank and GATT were created in the same period as the emerging victors of WWII searched for a way to avoid the destabilizing monetary crises leading to the war. The Bretton Woods agreement resulted in a system of fixed exchange rates that reinstated The Gold Standard partly, fixing the USD at $35.00 per ounce of Gold and fixing the other main currencies to the dollar, initially intended to be on a permanent basis. TheBretton Woods system came under increasing pressure as national economies moved in different directions during the 1960s. A number of realignments held the system alive for a long time but eventually Bretton Woods collapsed in the early 1970s following president Nixons suspension of the gold convertibility in August 1971. The dollar was not any longer suited as the sole international currency at a time when it was under severe pressure from increasing US budget and trade deficits. Thelast few decades have seen foreign exchange trading develop into the worlds largest global market. Restrictions on capital flows have been removed in most countries, leaving the market forces free to adjustforeign exchange ratesaccording to their perceived values. TheEuropean Economic Community introduced a new system of fixed exchange rates in 1979, the European Monetary System. The quest continued in Europe for currency stability with the 1991 signing of The Maastricht treaty. This was to not only fix exchange rates but also actually replace many of them with the Euro in 2002. London was, and remains the principal offshore market. In the 1980s, it became the key center in the Eurodollar market when British banks began lending dollars as an alternative to pounds in order to maintain their leading position in global finance. InAsia, the lack of sustainability of fixedforeign exchange rateshas gained new relevance with the events in South East Asia in the latter part of 1997, where currency after currency was devalued against the US dollar, leaving other fixed exchange rates in particular in South America also looking very vulnerable. Whilecommercial companies have had to face a much more volatile currency environment in recent years, investors and financial institutions have discovered a new playground. The FOREX exchange market initially worked under the central banks and the governmental institutions but later on it accommodated the various institutions. At present it also includes the dot com booms and the World Wide Web. The size of the FOREX market now dwarfs any other investment market. Theforeign exchange marketis the largest financial market in the world. Approximately 1.9 trillion dollars are traded daily in theforeign exchange market. It is estimated that more than USD 1,200 Billion are traded every day. It can be said easily that FOREX market is a lucrative opportunity for the modern day savvy investor CHAPTER 3: METHODS OF QUOTING EXCHANGE RATES There are two methods of quoting exchange rates. Direct method: For change in exchange rate if foreign currency is kept constant and home currency is kept variable, then the rates are stated be expressed in ‘Direct Method E.g. US $1 = Rs. 45.50. Indirect method: For change in exchange rate if home currency is kept constant and foreign currency is kept variable, then the rates are stated be expressed in ‘Indirect Method. E.g. Rs. 100 = US $ 2.5116 With the effect from August 2, 1993, all the exchange rates are quoted in direct method, i.e. US $1 = Rs. 45.50 GBP1 = Rs. 79.82 Method of Quotation In the Forex market there are two rates like one is for buying and one is for selling rates. This helps in eliminating the risk of being given bad rates i.e. if a party comes to know what the other party intends to do i.e., buy or sell, the former can take the latter for a ride. There are two parties in an exchange deal of currencies. To begin the deal one party asks for quote from another party and the other party quotes a rate. The party asking for a quote is known as ‘Asking party and the party giving quote is known as ‘Quoting party The advantages of two way quote. Ø It automatically ensures alignment of rates with market rates. Ø The market constantly makes available price for buyers and sellers. Ø Two-way price limits the profit margin of the quoting bank and comparison of one quote with another quote can be done immediately. Ø It is not necessary for any player in the market to show whether he intends to buy or sell foreign currency but this ensures that the quoting bank cannot take advantage by manipulating the prices. Ø Two-way quotes lend depth and liquidity to the market and which is very essential for efficient. Ø In two-way quotes for the first rate is the rate for buying and another rate is for selling. We should understand here that in India the banks which are authorized dealers, always quote rates. So the rates quote buying and selling is for banks will buy the dollars from him so while calculation the first rate will be used which is a buying rate, as the bank is buying the dollars from the exporter. Ø The same case will happen inversely with the importer, as he will buy the dollars from the banks and bank will sell dollars to importer. BASE CURRENCY Even if a foreign currency can be bought and sold in the same way as a commodity but theyre use as a minor difference in buying/selling of currency aid commodities. Unlike in case of commodities, in case of foreign currencies two currencies are involved so, it is necessary to know which the currency to be bought and sold is and the same one is known as ‘Base Currency. BID OFFER RATES The buying and selling rates are also referred to as the bid and offered rates. In the dollar exchange rates referred to above, namely, $ 1.6288/96, the quoting bank is offering (selling) dollars at $ 1.6288 per pound while bidding for them (buying) at $ 1.6296. So in this quotation the bid rate for dollars is $ 1.6296 while the offered rate is $ 1.6288. The bid rate for one currency is automatically the offered rate for the other. In the above example, the bid rate for dollars $ 1.6296, is also the offered rate of pounds. CROSS RATE CALCULATION US Dollar is the most trading currency in the forex market. In other words one support of most exchange trades is the US currency so margins between bid and offered rates are lowest quotations if the US dollar. The margins tend to widen for cross rates, as the following calculation would show. Consider the following structure: GBP 1.00 = USD 1.6288/96 EUR 1.00 = USD 1.1276/80 In this rate structure, we have to calculate the bid and offered rates for the euro in terms of pounds. Let us see how the offered (selling) rate for euro can be calculated. Starting with the pound, you will have to buy US dollars at the offered rate of USD 1.6288 and buy Euros against the dollar at the offered rate for euro at USD 1.1280. The offered rate for the euro in terms of GBP, therefore, becomes EUR (1.6288*1.1280), i.e. EUR 1.4441 per GBP, or more conventionally, GBP 0.6925 per euro. Similarly, the bid rate the euro can be seen to be EUR 1.4454 per GBP (or GBP 0.6918 per euro). Thus, the quotation becomes GBP 1.00 = EUR 1.4441/54. It will be eagerly noticed that in percentage terms the difference between the bid and offered rate is higher for the EUR: pound rate as compared to dollar: EUR or pound: dollar rates. CHAPTER 4: ADVANTAGES OF FOREX MARKET The Forex market is by far the largest and most liquid in the world but also day traders have up to now focused on looking for profits in mainly stock and futures markets. This is mainly due to the restrictive nature of bank-offered forex trading services. There are Advanced Currency Markets (ACM) offers both online and traditional phone forex-trading services to the small investor with minimum account opening values starting at 5000 USD. There are many advantages to trading spot foreign exchange as opposed to trading stocks and futures. These are the some advantages as under. Commissions: ACM offers foreign exchange trading commission free. This is in sharp contrast to (once again) what stock and futures brokers offer. A stock trade can cost anywhere between USD 5 and 30 per trade with online brokers and typically up to USD 150 with full service brokers. Futures brokers can charge commissions anywhere between USD 10 and 30 on a round turn basis. Margins requirements: ACM offers a foreign exchange trading with a 1% margin. In laymans terms that means a trader can control a position of a value of USD 1000000 with a mere USD 10000 in his account. By comparison, futures margins are not only constantly changing but are also often quite sizeable. Stocks are generally traded on a non-margined basis and when they are, it can be as restrictive as 50% or so. 24 hour market: Foreign exchange market trading occurs over a 24 hour period picking up in Asia around 24:00 CET Sunday evening and coming to an end in the United States on Friday around 23:00 CET. Although ECNs (electronic communications networks) exist for stock markets and futures markets (like Globex) that supply after hours trading, liquidity is often low and prices offered can often be uncompetitive. No Limit up / limit down: Futures markets contain certain constraints that limit the number and type of transactions a trader can make under certain price conditions. When the price of a certain currency rises or falls beyond a certain pre-determined daily level traders are restricted from initiating new positions and are limited only to liquidating existing positions if they so desire. The controlling of daily price volatility is the main mechanism but in effect since the futures currency market follows the spot market anyway the following day the futures market may undergo what is called a gap or we can say also in other words the futures price will re-adjust to the spot price the next day. In the OTC market no such trading constraints exist permitting the trader to truly implement his trading strategy to the fullest extent. Since a trader can protect his position from large unexpected price movements with stop-loss orders the high volatility in the spot market can be fully controlled. Sell before you buy: Equity brokers offer very restrictive short-selling margin requirements to customers. This means that a customer does not possess the liquidity to be able to sell stock before he buys it. When initiating a selling or buying position in the spot market a trader has exactly the same capacity in margin wise. In spot trading when you are selling one currency you are necessarily buying another. CHAPTER 5: FOREX EXCHANGE RISK The Risk Management Guidelines are primarily an accent of some good and prudent practices in exposure management. They have to be understood and slowly internalized and customized so that they yield positive reimbursement to the company over time. Any business is open to risks from movements in competitors prices, raw material prices, competitors cost of capital, foreign exchange rates and interest rates, all of which need to be (ideally) managed. Forex Risk Everywhere in the world risk is attached. Without risk there is no gain. Also the FOREX is not risk-free. Like if you are trading with substantial sums of money and there is always a possibility that trades will go against you.Also there are several trading tools so that can minimize your risk and with caution and above all education the FOREX trader can learn how to trade profitably and while minimizing losses. Risks Assuming you are dealing with a reputable broker and there are still risks to FOREX trading. Transactions are subject to unexpected rate changes, volatile markets and political events. Exchange Rate Risk: Exchange rate risk which refers to the fluctuations in the currency prices over a long trading period. The Prices can fall rapidly which are resulting in substantial losses unless and until stop loss orders are used when trading FOREX. And so stop loss orders specify that the open position should be closed if currency prices pass a predetermined level. Stop loss orders can be used in conjunction with limit orders to automate FOREX trading limit orders specify an open position should be closed at a specified profit target. Interest Rate Risk: It can result from discrepancies between the interest rates in the two countries which represented by the currency pair in a FOREX quote. This discrepancy can result in variations from the expected profit or loss of a particular FOREX transaction. Credit Risk: It is the possibility that when the deal is closed one party in a FOREX transaction may not honor their debt and this may happen when a bank or financial institution declares insolvency. The Credit risk is minimized by dealing on regulated exchanges which require members to be monitored for credit worthiness. Country Risk: Country risk is connected with governments that may become involved in foreign exchange markets by limiting the flow of currency. There is more country risk associated with exotic currencies than with major currencies that allow the free trading of their currency. Limiting Risk in your FOREX currency trading system FOREX trading can be very risky but there are ways to limit your risk and financial exposure. Every FOREX trader should have a trading strategy for knowing when to enter and when to ex

Holocaust :: essays research papers

  Ã‚  Ã‚  Ã‚  Ã‚  The Holocaust was a tragic event that ended many Jewish lives. The Nazis murdered over 6 million innocent Jews. They tortured so many of them leaving the few Holocaust survivors with horrid memories.   Ã‚  Ã‚  Ã‚  Ã‚  Propaganda played a huge role and affected many people’s thinking during this time period. The propaganda was designed to influence the targeted people’s opinions, beliefs, and emotions. Joseph Paul Goebbel’s was the German national socialist propagandist. He had complete control over radio, press, cinema, and theater. What the propagandist preached may have been either true or false. They did whatever it took to sway the people to believe their ideas. They wanted people to think that their way was right.   Ã‚  Ã‚  Ã‚  Ã‚  The Nazi’s were known for using terms that had literal and actual meaning in their propagandized language. Their thoughts were hammered into people’s brains so they soon became unconsciously thinking the way the Nazi’s did. The propagandist had rules like our 10 Commandments. The first three were to divide and conquer, tell the people what they want, and the bigger the lie, the more people will believe it. (www.primenet.com/~popgnda/goebbels.htm)   Ã‚  Ã‚  Ã‚  Ã‚  Like I stated earlier, propaganda was used to sway the ideas and minds of Jews, just like the hoax that took place at Theresienstadt. Theresienstadt was a ghetto concentration camp. It was located in today’s Czech Republic. It was suppose to be the â€Å"model ghetto† for the Red Cross. There were rumors about this killing center so the Nazis arranged a hoax. A lot was done to this ghetto; a cafà © was created, a children’s opera was performed, a monument was built to honor the dead.

Addiction to Modern Technology Essay

Software for Accountants: From Tax Preparation to Full Service AccountingWhether your business exclusively offers tax preparation services or provides full-spectrum accounting services, it’s important to maintain a profitable investment in software tools that allow you to accurately and efficiently perform your professional services. Typical tools for accountants include client write-up, auditing, tax preparation, payroll, and time and billing modules. Each of these modules are designed with the end-goal of managing 3rd party accounting more effectively and efficiently.Multi-Company AccountingAccounting software designed for the professional accountant offers an advanced set of features beyond what is typically found in standard commercial accounting packages. One critical capability of software designed with the accountant in mind is the ability to handle accounting for numerous corporate entities. Your accounting business may have dozens or even hundreds of clients, whose financial data all needs to be accessed from the same software, yet kept completely separated. Increased security measures and a more complex database structure are two of the ramifications of managing books for multiple companies. Given the amount of data your business may store on clients, it’s important when considering different options, that you consider how the software handles tens of thousands of individual records. Even accountants with few clients can easily exceed the record capabilities of many non-accountant specific systems. See more: Satirical essay about drugs The effects of overloading a system can include reduced performance (freezes, waiting on reports) and even system access issues.An Emphasis on ReportingStrong reporting features are critical for accountants. Accountants are constantly creating reports for clients. If clients can’t understand the reports, there is a major problem. Software designed for accountants typically offers additional report views distilling information into easily understandable formats such as executive reports, charts, and summary statements. Reports also need to be able created on an ad-hoc basis in order to answer questions that clients may have regarding their company’s financial performance. Tax PreparationTax preparation is not straight-forward and simple. If it was, thousands of business likely wouldn’t outsource their tax preparation to accounting firms. The reality is that preparing corporate tax information is a highly complex process. Tax preparation software is designed to make the process easier by keeping updated tax tables, automatically performing complex calculations, and by assisting with electronic filing. No matter where you are or what local, state, provincial, or federal tax regulations apply, there are programs designed to help you quickly and accurately file your clients’ returns.Regulations CompliancePublic accounting firms are also on the front lines of keeping up with the accounting compliance regulations. Understanding FASB, GASB 34, IFRS, DCAA and other regulatory requirements is only part of the battle though for the public accountant. Software controls are constantly evolving to better meet the regulatory requirements of clients in different industries and access to the right tools can make the difference is securing clients with specific compliance requirements.Data Integrity and SecurityData integrity is another area of paramount concern for public accountants. A company doing their own books has an opportunity to reverse entries as errors are discovered. This is not the case with public accountants. The expectation is 100% accurate information the first time around.Software tools for accountants also focus on providing advanced security measures. Clients naturally have concerns about turning their data over to a 3rd party. It’s important for accountants to be able to identify specific measures included in software tools which can prevent fraud or loss of data.http://findaccountingsoftware.com/guide/industry/accounting/| The cloud benefits accountantsThe age of the cloud has made the lives of many accountants much easier. Instead of constantly sending files back and forth, they now can run their desktop accounting software in the cloud and work with clients to manage their accounting. By using accounting and budgeting software in the cloud, accountants don’t have to waste their time backtracking with clients, allowing them to spend more energy on providing they can provide other services such as analyzing their financial data and helping their clients improve their cashflow and profitability.The cloud allows accountants to become an integral part of their clients’ budgeting process, and eventually their business. Often, when a client feels a sense of trust for their accountant, they will begin relying on them for financial advice on other aspects of their business such as additional revenue/services, when it is right to use business credit cards and some of the best practices for successful recordkeeping.http://www.planguru.com/blog/accounting-software-in-the-cloud-b

Economi Portfolio Essay

Price elasticity of demand (PED ) is the measure of the responsiveness of the demand for a certain good to a change in the price of this good. It is a measure of how consumers react to a change in price. The formula used to calculate the price elasticity of demand for a given product is : % change in quantity demanded of good A PED = % change in prices of good A Figure 1 : demand â€Å"VW on Monday revealed net income of à ¯Ã‚ ¿Ã‚ ½4.7bn ($6bn) last year, 14 per cent higher than in 2007, while sales increased 4.5 per cent to à ¯Ã‚ ¿Ã‚ ½114bn as VW sold 6.3m vehicles.† This situation is shown in figure 1. There was a shift in demand curve to the right, from D1 to D2, as sales increased. VW sales increased from Q1 to Q2, and they could set higher price for their cars, which increased from p1 to p2. Car market is a type of a monopolistically competitive market. Monopolistic competition has two basic assumptions. Firstly, the producers haven’t much impact on degree of control over price. It means that they have to keep low prices for cars, because the marker is very competitive. Secondly, there are many producers and many consumers, while no business has total control over the market price. Moreover, it is assumed that all firms are profit-maximizers, and the same is with Volkswagen. It will not be concerned about revenue maximization or sales maximization, but only profit maximization. The number of workers it employs is also not important, nor environmental aims which are crucial these days. Most of the firms are not concerned about the environment, and this is why there is negative externality of consumption and production of VW cars. Manufactures emit greenhouse gasses and consumers’ cars also emit greenhouse gasses. However, Volkswagen wants only to maximize its profit. As car market is monopolistically competitive market, figure 2 will best represents VW costs and revenues. â€Å"VW on Monday revealed net income of à ¯Ã‚ ¿Ã‚ ½4.7bn ($6bn) last year†, so there was abnormal profit which is marked as pink area on the figure 2. The abnormal profit is the total revenue minus total cost at the level of output where MC curve is equal to MR curve. Figure 2 : abnormal profit Figure 3. losses It is said in the article that this year â€Å"earnings will not reach the high levels of previous years.†. It may be possible that VW will make only losses, which is shown in figure 3. Again, the total abnormal profit or loss is between the AC curve and AR curve at the level of output where profits are maximized (Q). The loss of Volkswagen is marked as the red rectangle in figure 3. VW has many ways to increase demand for their cars. First of all, they should spend more money on innovation, because consumers can be attracted by VW cars with the newest technology. VW works in monopolistic competition and it can â€Å"steal† consumers from other car makers, who will prefer Volkswagen cars. There are three possibilities of what VW may do. Volkswagen should shut down in the short run if it is unable to cover all its variable costs in the short run. This level of price is knows as shut-down price. Secondly, it may operate in the short run, when it is able to cover all its variable costs in the short run. This is known as break-even price and VW will operate in the short run so that it can make an abnormal profit in the long run. Finally, Volkswagen may operate at the profit-maximising level of output if it wants to make abnormal profit in the short run.