Lab report paraphrasing Essay Example | Topics and Well Written Essays - 250 words

Lab report paraphrasing - Essay Example According to Experiment 1 observations, the T value of the signal when increased to 2 seconds from 0.5 seconds in 0.5 increments, the Fourier Transform accuracy also rises. Consequently, it is also evident that when the value of T is 0.5 seconds, the graph appears exceptionally different from the other 3 graphs since the period is not a big number to show the 2 tasks. These roles are actually the ones indicated on with line with the other one being made from the size of the troughs and peaks. This can clearly be seen when T=2 seconds in the graph in experiment 1. A correct value could not be displayed by the power spectrum because T value was too tiny. As illustrated, whenever the value of T rises, the power spectrum begins to exhibit the 2 co-sinusoids. When the experiment is over, it becomes clear that the magnitude of code required to solve the FFT is much shorter and simpler than the substitute DFT code. The other point to put into consideration would be the results obtained in section 3 of experiment 2.Thus, these results showed the time consumed to determine the DFT as well as the FFT, something that demonstrates that the FFT is quicker and realistic for determining the Fourier Transform. Consequently, FFT can be utilised in different methods through the entire electrical engineering comprising of researching on audio waves as well as the technique involving the audio signals, especially in recognition of pattern in instances where an engineer is searching for definite similarities or points, in addition to medical imagery like MRI scans etc. The above are just a few of numerous uses that electrical engineers are provided for by FFT at

Lifes Ups and Downs Essay Example for Free

Lifes Ups and Downs Essay One warm weekend in June, my girlfriend decided she wanted to take me on a weekend getaway to none other than Las Vegas, Nevada, a place where no one else existed but me and her. So I thought. I was totally ecstatic; at this point it’s been moths since we’ve been out just the two of us with no kids. The first night we get there we get dressed up and make reservations at our favorite restaurant. The moment we get to the restaurant, she starts acting weird and all of a sudden does not find a single thing on the menu appetizing and complains of a stomach ache, so we leave in a hurry. Arriving back to our suite, there is a card taped to the door with her name on it. So many thoughts are racing through my mind, â€Å"She is planning something special for us, she has a surprise for me, maybe she ordered room service while we were out and it was inside waiting for us.† As quickly as the thought came they left, we entered the room only for her to admit she was just too tired and needed to rest. So I let her, I laid next to her wondering what was going on, what was going on in her mind. It was almost like we were living in two different worlds. As she slept curiosity suddenly came over me, very quietly I got out of bed grabbing her bag which contained the note that was tapped to the door, into the bathroom I went. My eyes could not believe what was written so boldly across the paper â€Å"I HOPE SHE WAS WORTH IT.† I could not resist questioning the matter at hand, I woke her up and she blatantly denied there being any meaning to this card. We argued hard and like ever before, almost like she had forgotten who I was, like I didn’t matter to her. The rest of the night went on and we were both hurt. I used indirect termination strategies to spare my heart anymore hurt. I couldn’t come to terms that this was finally coming to an end. Four years later, I found out I was never her one and only I was simply her girlfriend number two. Being very cautious to every relationship offer that came my way, I turned down so many. I did not care to see another relationship. I was never one to â€Å"get-over† a bad situation, but I knew I had to move on; I couldn’t come to terms with my last break up. Just as soon as I let down my guard, there she was someone who made me feel alive again. She helped me heal every wound in my heart and soul. Until, I started to see some similarities from my past relationship. She was so secretive, there began to be relational violence. I had to wear sunglasses everywhere I went even if I was inside because of the bruises I would have from the nights before when I didn’t do what I was asked in a timely manner. When the questions came from my friends and co-workers I had to lie. My life has never had so much deception I soon began believing in my own lies. I questioned her I didn’t understand why I had become her human punching bag. She was so cold and nonchalant towards me. As the days went by the dresser drawers slowly became empty the closet became empty and there seemed to be less and less of her things at my place. I wanted to know what was happening, was my life slowly slipping away again? So I picked up the phone and attempted to call her, I got no answer. Days went by without me hearing from her. Then I realized our relationship had ended in sudden death. There was no contact between us. The outside world became non-existent to me. I could not cope with the thought of another relationship ending so sudden. My life hasn’t been the same, how do you wake up one day to a world that isn’t your own? Relearning life one day at a time has been tough but I am a fighter this too will make me stronger!

Contemporary Social Structures Essay Example for Free

Contemporary Social Structures Essay Define and explain the concept ‘Contemporary Social structures’ and the role of such structures and the role of such structures in regulating life and beliefs. Structures are both the medium and the outcome of the practices which constitutes social systems- Anthony Giddens (1938) in simpler terms people shape structure, but structure determines what people do. Contemporary Social structures are restraints that affect the lives all members of society. Whether we are aware of it or not, we live in societies that consist of social structures, every society has its own set of social structures such as religion, class, gender and ethnicity. We also have the social structures that interlink such as the educational political social structure as public schools, colleges and universities depend on the government for their funds. social structures are embodied in our everyday actions, thoughts and beliefs as human beings, there are effective in controlling as well as organizing the behaviour of an individual or individuals as the main purpose of a social structure is to maintain a co-operative regime for all members of society, however there are consequences for certain groups in society. Every society has its own set of contemporary social constructions for an example class; gender and ethnicity are all constraints that all societies experience. An example of a social structure is class, a class structure is found in most if not all societies, it is one of the main sources of economic inequality, certain individuals would identify there being to classes in society: the Bourgeoisie who own all the means of production and the Proletariat who are exploited by the Bourgeoisie. As mentioned above Gender is also a constraint when regarding social structures, the term ‘gender roles’ has been commonly used to describe the prescribed roles of a male and female in society. In the past females have struggled to be accepted in to the workforce, even though this has changed dramatically during recent years equal opportunities are not the same for men and women due to the social structures and the way they regulate our life and beliefs, for an example a man is given 6 weeks maternal leave as society believes it is the males role to the ‘breadwinner’ while the female receives a years maternal leave as she is seen as the ‘homemaker’ that stays home taking responsibility for the children and all the homely duties. Although this may not apply to all societies some would describe Ethnicity as playing a part on what we as individuals can achieve in life by affecting our positions in the labour market. A social structure is formed by the distribution of wealth, power and prestige. They consists of beliefs about the world and both compel and regulate our actions, as mentioned previously religion , gender and ethnicity are social structures, they are all created within society itself , each and every group share common attitudes , views, values, social norms, lifestyle and in some cases material goods. Individuals in society stay within the prescribed guidelines of the social structures they were born and socialised into, that refers to being rich or poor, male or female or being young middle aged and old. Class structure determines our life chances and is the basic structure for all modern societies. According to McGregor (1989) class is the main cause of inequality. He explains that different clas s groups begin their lives with unequal opportunities which effects the type of education an individual will receive , the social connections an individual will make and the way that individual will speak ad behave. He also argues that the class that an individual belongs to is determined by various factors such as power, family background, wealth, lifestyle, mannerisms, social interactions, and employment; he also describes class as being separated in to three different groups which are the upper class, middle class and lower class. Abercrombie (2000), states that the upper-class is distinguished from others, by their wealth and power. In contrast to the other classes the upper class only consists of a few people, the individuals included in this group are employers who own large amounts of land and others who are self-employed, have careers as managers or professionals. Wealth is distributed among the wealth in many ways such as inheritance, with wealth individuals are given the opportunity to live the life they will lead. The educational system reinforces many inequalities insuring that those of the highest class have access to better opportunities and better chances of reaching success. Memb ers of the upper class attend private school together. From sharing educational experiences the upper class learn how to interact with each other; form long lasting relationships with each other which gives them an advantage, a series of events are created meaning that when their children go to private school their lives will follow the same path. From these important contacts the upper class make simply by going to school they have formed very powerful contacts who have the potential to enhance their career prospects and greater opportunities of success in which ever career they wish to pursue. In most societies there is a clear division of labour between men and woman and in general women are always in the inferior position. Gender plays a role in the way we are treated by other members of society. We are also taught to behave in certain ways depending on whether we are male or female. Males are typically expected to feel, think and behave in a ‘masculine way’ and females in a ‘feminine’ way. Some examples of this are girls playing with dolls, preparing for when they will be mothers and boys playing with action figures, learning the male traits such as aggression and dominance. In some societies a woman is born into a certain social structure that includes a life of housework, cooking and child rearing. Women are less likely to be offered positions in the labour market in comparison to men and are unable to attain positions of power with a high income such as men do. Women are employment but in some cases will still earn a lower income than the male dominated position. Conclusion: As explained in the essay, social structures are restraints that affect that will affect all members of society. Class is a basic contributing factor of all social structures to the unequal economy and affects the life of all members of society. Those who are at the top of the economy ladder come from wealthy family backgrounds. These people benefit in many ways such as promotional opportunities and job security. Migrants with non-English speaking backgrounds have difficulty in finding quality employment however its far more difficult for the women in this group, As gender is a factor in employment opportunities, women who are from an ethnic group of the minority have the least opportunity in the labour market, the limited education and training, poor health and nutrition, lack of freedom and denied access to resources are all factors that reduce the quality of life and hinder economic efficiency and growth for women, people of diverse ethnic groups and people with poor family backgrounds. Social structures unquestionably have an impact on our lives and depending on the circumstances the impact for some is usually one that is undesirable. Society cannot be blamed for the social structures that it has created, it is a gradual process, it has taken many years to create these constraints and it will take many more to break them down. References /Bibliography Fulcher,C . J.,Scott, 2007, Sociology,3RD ed, Oxford Abercrombie, N., 2000, The Penguin Dictionary of Sociology, 4TH ed, Penguin Books, London McGregor, C., 1989, `Class, in Four Dimensional Social Space, Jatenburg P.DAlton, Harper Row, Sydney Webb,W. Westergaard,H. Trobe.K Steele.L ,2008,AS SOCIOLOGY,2ND ed,Napier Press,Brentwood

Foreign Exchange Risk Exposure on Toyota Motors

Foreign Exchange Risk Exposure on Toyota Motors The globalization phenomenon allows companies to internationally expand their sales and production activities. A consequence of this phenomenon, however, is the existence of foreign exchange rate exposure which can impact the companys profitability, net cash flow and market values. In the past years, several academic researches have been developed in order to explain and analyze how foreign exchange risk exposure fluctuations affect a multinational company or a purely domestic company value, and how this risk is influenced by the companys risk management strategy. Consequently, this dissertation aims to find some knowledge on these subjects for a specific company, Toyota Motor Corporation. By applying the capital market approach and analyzing three different periods, it is possible to conclude that Toyota Motor Corporation, in a crisis situation, was able to protect itself against some of the primary exchange rates fluctuations it is exposed to. Thus, the predictability of higher fluctuations allows the company to apply effective risk management strategies. Considering a ten year period, bilateral exchange rate fluctuations are more significant to the company stock returns than for other periods. However, being an exporting company, its coefficient for exposure is not consistent with the competitive advantage an exporter holds when its company home currency depreciates. It is consistent, however, when the broad currency index is considered. Additionally, the impact of foreign exchange risk fluctuations is small for company stock returns. This can thus indicate that exchange rate fluctuations dont have a significant impact on company stock price returns. INTRODUCTION The globalization phenomenon has allowed the integration of national economies into the international economy, giving them easier access to information, goods and services through trade and foreign direct investment around the world. This process has been encouraging an increasing number of companies to start operating on a global scale, expanding their networks worldwide. In recent years, the number of multinational companies has grown in order to respond to the competitiveness experienced in the domestic market and explore new markets to produce or sell new products and services. Multinational companies, or purely domestic companies with a broad network, are exposed to several risks. An important risk that has a significant impact on the management of a company is the foreign exchange risk, due to the fact that it may affect the companys cash flows, value and performance. Nevertheless, besides the foreign exchange risk, many other risks affect companies, such as the interest rate r isk. Several financial and operating instruments and techniques are being used and developed by multinational companies to handle these risks. However, in order to manage these risks, companies must know exactly what their risks are and how to measure them. With regard to foreign exchange rate exposure, several studies conducted in recent years have presented various risk management approaches in order to understand to what extent its fluctuations affect the companys value and performance. However, there is little consensus among the different studies, which indicates that exchange rates are complex and can affect and be affected by different factors. The most traditional approaches are the cash flow approach and the capital market approach. In this study, the capital market approach is used to assess, through quantitative methods, to what extent foreign exchange rate fluctuations affect the companys value. It is important to note that several studies using quantitative methods found no statistical significance when trying to understand the impacts of foreign exchange fluctuations on the companys value. Thus, an explanation given for this fact was that the company was able to protect itself against foreign exchange rate fluctuations by means of hedging instruments and techniques. The main purpose of this study is to analyze the foreign exchange risk exposure of a multinational company using the capital market approach, and also to what extent the various assumptions underlying this approach produce different results. The choice of the multinational company was based on the following requirements: it had to be a public company operating in a competitive industry and could not be the subject of any other study in the same area. Accordingly, the Toyota Motor Corporation was chosen. Its main plants are located in Japan; it operates in the Automotive Industry and was the worlds largest manufacturer in 2009. Furthermore, 61.4% of total sales to external costumers are overseas, which indicates that the company is likely to face considerable impacts from foreign exchange risk exposure. In order to achieve the main purpose of this study, Toyotas foreign operations are analyzed in a first phase to understand to what extent the company is internationalized. Moreover, this initial analysis also envisages the foreign exchange rate fluctuations against the companys stock price returns and their direct impact on its report accounts, as well as the hedging instruments used to handle the foreign exchange risk. In a second phase, the capital market approach is used to suggest that foreign exchange risk exposure could be measured as the sensitivity of stock price returns to exchange rate movements. This approach requires the implementation of statistical regressions. For this purpose, market, stock price and foreign exchange rate data were collected from 1999 to 2009. Considering the studies developed by different authors, regressions involve several hypotheses for the exchange rate variables, such as a Nominal Broad Index that is like a basket of currencies and several bilateral exchange rates, in order to understand which variables affect stock price returns. In this second phase, the quantitative method is applied to three different periods in order to compare how the company handles the foreign exchange risk. As this dissertation takes into account the investors point of view, it can help to understand how investors determine and quantify the exposure of their portfolio to the foreign ex change risk. Moreover, this approach allows comparing the companys exposure to foreign exchange rate fluctuations with that of competitors in order to understand the effectiveness of the hedging activities. To complement this study, this dissertation is organized under the following sections: The first section is a thorough review of the literature on this subject. It explains why it is important that companies know how to handle the foreign exchange risk and presents the findings of past research. In the second section, the traditional categories of foreign exchange risk exposure are described, the effects of hedging the foreign exchange risks are shown and the most used analysis methods are discussed. The third section provides an overview of Toyota and an analysis of its foreign operations. The main purpose of this section is to support the interpretations that emerge from the regression results and this information is used as the basis for selecting the variables for the regression model. In the fourth section, relevant analyses are provided about the variables that may be a source of risk for Toyota and which were chosen for the regression model. In addition to this, it presents the hedging programs undertaken, the designated and undesignated financial instruments used and the reasons why the company does not need to have financial instruments to hedge translation and economic exposure. The fifth section describes the methodology used. The reasoning, as well as the issues of each variable included in the model, is expressed in this section. It also presents the study time periods and data sources. In addition to this, it provides an analysis of the descriptive statistics for the data and different periods used in the model. The sixth section contains the regression results and provides an analysis and explanation of the findings. It also presents the limitations of the software used for the regressions and a brief analysis of the foreign exchange risk exposure of Honda and Nissan Motor Corporation. The seventh and last section summarizes the main conclusions of this study and presents some suggestions for further research. LITERATURE REVIEW The goal of creating a global business has, in the past years, been the fundamental reason behind the growth of multinational companies. Such an example is the registered growth in Japanese companies exports. In 2000 and 2009, exports from Japanese companies amounted to 0.8%  [1]  and 10.8%1 of the GDP, respectively. An annual growth of 32.9% in foreign activity, for a nine year period, is one of many advantages that companies can obtain by opening themselves in many ways. Other advantages include the opportunity to diversify labor force, to enter new markets and sell more, to reduce transport costs and to benefit from economies of scale. This, however, also creates new problems, challenges and demands. A multinational company is either a company with operating subsidiaries, branches or affiliates in more than one country, or a purely domestic company engaged in international activities (imports and exports). Some of the new problems and challenges these companies face include an increased exposure to foreign risks, such as exchange rates, interest rates and commodity prices [Miller, 1998]. Moreover, the risks associated to exchange rates appear do to the contact with new currencies  [2]  . Exchange rates constitute one of the most important macroeconomic risks, which can potentially impact, positively or negatively, the companies profitability, cash-flows and market value, due to exchange rate fluctuations. Consequently, in order to handle exchange risk exposure, companies can adopt several hedging tools. In the past decades, thanks to the increasing number of international trade activities and multinational enterprises, as well as the large currency fluctuations registered, the volume of research that tries to measure and analyze the impact of exchange rate fluctuations in multinational companies and their vulnerability to it has grown. However, produced results/conclusions have a mixed nature due to the complexity of this subject. The main goal in this section is to understand, through previous researches, what types of companies are most affected by exchange risk exposure, the importance of hedging, several types of foreign exchange risk exposure, types of hedging activities depending on the foreign exchange risk exposure the company is facing and traditional approaches to measure exchange risk exposure. Exchange Risk Exposure of Multinational Companies vs. Domestic Companies Thanks to the phenomenon of globalization, as well as the increase in companies foreign activities, several researches have been developed in order to give some input on what type of companies show a higher exchange risk exposure: multinational or domestic companies. The results of previous empirical studies suggest that only certain industries and/or companies are exposed to foreign exchange risk  [5]  . In the other hand, even a purely domestic company with importing or exporting activities is impacted by fluctuations in exchange rates. This idea is connected with competitive advantage; for instance, the products an exporting company sells abroad can still affect the companys value due to the effect of exchange rate fluctuations in competitors, suppliers and in customers demands. Muller and Verschoor (2006) concluded in their study that a companys size is also an indicator of its foreign exposure. They found that a companys lower dividend payout ratio results in a stronger short-term liquidity position and, consequently, a smaller hedging motivation and a higher exchange risk exposure. Other authors however, such as Choi and Jiang (2009), defend that multinationality is important for a companys exchange exposure, but not in the popular notion that was mentioned. Some authors found evidences that foreign exchange risk exposure is actually higher and more significant in absolute magnitude for domestic companies, when compared to multinational companies. The existing explanation for this finding is the fact that multinational enterprises are more capable to effectively and easily use financial hedging and operational hedging in order to reduce their position against foreign exchange risk, and also to increase their stock returns. Additionally, these companies are more aware of foreign exchange risks. Dominguez and Tesar (2006) agree with this finding and they also found that small companies, rather than large and medium-sized companies, show a higher exposure due to the same reasons. As a result, companies that dont engage directly in international business but compet e against foreign companies can be affected by exchange rate fluctuations [Dominguez, Tesar, 2006]. Dominguez and Tesar (2006) also found that the industry level may influence exposure. They suggest that exposure increases in highly competitive industries. In more competitive industries, however, an almost perfect pass-through can be expected since they are more aware of their vulnerability and are consequently better motivated to hedge foreign exchange risks, when compared with less competitive industries  [6]  . Regarding purely domestic companies, Pritamani, Some and Singal (2005) found that importing companies are more affected by fluctuations in exchange rates than exporting companies. Therefore, companies with importing activities should have more reasons to hedge exchange risk exposure. The Importance of Hedging Exchange Risk Exposure Hedging means taking a position when acquiring a cash-flow, an asset or a contract in order to protect the owner from losses and to eliminate any gain in the position hedged. Several researches indicate that currency risk management is very important to manage earnings and unexpected losses. Consequently, this should be done in order to reduce any impacts on the stockholders equity and to prevent value declines for the equity holder due to cash flow changes and unfavorable exchange rate fluctuations, respectively. Hedging currency exposure can therefore reduce some of the expected fluctuations in future cash flows and increase their predictability [Smith and Stulz, 1985]. It is believed that foreign exchange rate fluctuations impact financial decision-making in production, marketing, planning and strategy [Moffett and Karlsen, 1994]. It is therefore necessary to make contingent investments or develop long-term strategic plans and management perspectives in order to understand the volatility of foreign exchange. Companies can implement hedging tools based on policies that define when and how to hedge against foreign exchange risks. Hedging tools are not static mechanisms, companies are able to dynamically adjust their behavior in response to foreign exchange risks; for instance, a company can decide to hedge only part of their foreign transactions. To undertake these policies, the company needs to determine its risk tolerance and needs to understand the direction that the currency to which it is exposed is likely to take. A value maximization corporation that hedges its exposure to exchange risks can reduce the costs connected to financial distresses and taxes, as well as agency problems existing between shareholders and bondholders [Martin and Mauer, 2005]  [7]  . A possible reduction of financial distress costs allows investors to require lower risk premiums. Consequently, the company value increases [Smith and Stulz, 1985]. Therefore, as mentioned by Smith and Stulz (1985), hedging is part of the overall corporate financing policy. Moreover, Dumas and Solnik (1995) concluded that part of the return rate of an assets price is influenced by the foreign exchange risk premium. Thus, when a company implements risk management activities that decrease its foreign exchange risk exposure, the cost of capital is reduced. Some authors sustain that exposure management may not reduce total risk. Copeland and Joshi (1996) argued that anticipating hedging strategies is difficult given that so many other economic factors change when foreign exchange rates fluctuate. This is confirmed by Moffett and Karlsen (1994), who argue that the uncertain nature of future cash-flows hinders the implementation of long-term strategic plans and better investment decisions. It is also argued that risks connected to an inefficient hedging activity can increase exposure [Hagelin and Pramborg, 2004]. Additionally, currency risk management usually consumes some of the companys resources, consequently lowering its expected cash-flow [Eitman, Stonehil and Moffett, 2010]. Therefore, companies need to know whether their hedging strategies are successful or not, and if they are relevant to shareholders [Hagelin and Pramborg, 2004]. Findings regarding the Vulnerability of Multinational Companies to Foreign Exchange Risk Exposure Hedging tools that handle exposure to foreign exchange risks are not simple and they dont hold only a few complexities, since the companys exchange risk exposure correlates with its size, multinational status, foreign sales, international assets and competitiveness and trade at the industry [Dominguez, Tesar, 2006]. Adler and Dumas (1984) suggested that a companys foreign exchange risk exposure can be measured by the stock prices sensitivity to unexpected foreign exchange rate fluctuations. On the other hand, it could also be measured as the companys cash flows sensitivity to foreign exchange rate fluctuations. Considering that the main goal of this dissertation is to analyze economic exposure, it is important to note that several authors have developed researches that try to measure and analyze unexpected impacts of exchange rate fluctuations on companies performances, portfolios and Industries. Nevertheless, these researches have produced mixed empirical results. Jorion (1990) found that only 15 of 287 US multinational companies were statistically significant concerning the impacts of exchange rate fluctuations in companies stock returns. Additionally, the author detected that higher company foreign operations reflected higher exposure to exchange risks. Nevertheless, Bartov and Bodnar (1994) found that 208 of the companies with foreign operations that composed their sample were not statistically significant to the effect of US exchange rate fluctuations on companies stock price returns. Additionally, other researchers have reached mixed conclusions using different methodologies, samples and alternatives for the main variables. The inconsistency in these results, therefore, doesnt allow a sustainable conclusion on this subject. Recent studies, however, found evidences that exchange rate fluctuations do have an impact in companies performances. Such an example is the research developed by Dominguez and Teaser (2006), who found exposure to be statistically significant due to the effect of exchange rate movements on stock returns at Industry and country level. Some explanations have been pointed out by several authors for these mixed results. The registered contradiction can be explained by limitations concerning data, variables and methodologies used. Different researches develop different alternatives in order to determine foreign exchange risk factors and company values, which include different samples, the use of companies with less opened economies (USA) or more opened economies and different periods; all of these affect research. Bartram (2008) also explains that the use of stock returns to measure company value reflects the hedging position of companies, and the analysis is thus considering a lower level of risk exposure. Crabb (2002) also suggests that these mixed results can reflect different financial hedging strategies on data or simply reflect noisy data. Additionally, Bartram and Bodnar (2007) found that operational hedging activities help companies reduce their exposure and, consequently, have no statistical significance over the impact of foreign exchange rate fluctuations on companies returns. Therefore, as suggested by Crabb (2002), a statistically non significant exposure to exchange rates can result from an efficient hedging strategy set in place by the company. Types of Foreign Exchange Risk Exposure The hedging decision depends essentially on the level of risk exposure, its magnitude and the magnitude of hedging that companies deem necessary. Companies should essentially hedge activities that put them in a position with a high level of uncertainty, i.e., risk exposure in the strategy field (competitive, input supply, market demand and technological risk) and fields of interest to finance and international business scholars (foreign exchange risk), [Miller, 1998]. Before initiating the hedging process, the company has to decide what exchange risk exposure to hedge and how. There are three traditional foreign exchange rate exposure categories  [8]  that impact companies and that have a specific managing method: the transaction exposure, the operating exposure and the translation exposure. Generally, these exchange risk exposures can be hedged through the use of derivatives and financial instruments, such as commodities, futures and forward contracts, options and swaps [Miller, 1998]. The main goal of this dissertation is to measure and to analyze how unexpected foreign exchange rate fluctuations affect a multinational company. Notwithstanding it is also important to understand how the other two types of exposure impact companies and the types of hedging mechanisms available to handle exposure, in order to reach a deeper analysis and optimal conclusions. Economic Exposure Economic exposure, also known as operating exposure, is an unexpected change in exchange rates that affects the present value of the company by changing future operating cash flows, arising from inter-company and intra-company activities [Eitman, Stonehil and Moffett, 2010]. The unexpected exchange rate fluctuations affect the expected future operating cash-flows changing the volume, price and/or costs of future sales [Moffett and Karlsen, 1994]. Economic exposure approaches the impact of long-term currency exposure and analyzes the health of a companys business in the long run. The changes registered in the expected future cash flows depend of the change in the position the company holds in international competition  [10]  . Managing economic exposure involves all aspects of a company. Before establishing hedging policies, a company needs to measure its economic exposure. In order to do that a company should invest some resources in assessing its exposure, i.e., identifying the set of environmental contingencies affecting and relevant to the creation of shareholder value [Miller, 1998]. This identification allows the assessment of alternative environmental scenarios and consequent adoption of improved strategic decisions by the company. This is the reason why identifying and measuring economic exposure can be complex and difficult, bearing in mind that environmental contingencies vary across industries and across companies within those industries. Moreover, some authors mention economic exposure as being subjective, since it is based in estimates of future cash flows. Hedging Strategies The main goal of economic exposure management is to anticipate and influence unexpected and unpredictable effects in exchange rates. This can be accomplished if a company diversifies and changes its international operating and/or financing policies. This diversity allows the company to react in an active or passive way. The company can diversify operations through sales, location of production facilities and raw material sources or inputs [Eitman, Stonehil and Moffett, 2010]. A company can expand its sales through subsidiaries distributed across different countries, bringing its products or services to new markets and taking advantage of economies of scale, being also capable of diversifying its exposure to foreign exchange risks. Flexible management policies allowing a faster sourcing of raw materials and components can easily mitigate this exposure if this adaptation considers the impact of exchange rate fluctuations in the company costs and revenues. Additionally, RD can also mitigate this exposure, allowing the cutting back of costs and enhancing productivity as well as product differentiation. Choi (1989)  [11]  pointed out that international investment is one of the major instruments in managing economic exposure. In the same line, Miller and Reuer (1998) developed a study that showed this exposure is considerably reduced with a higher and direct foreign investment by the company (foreign market entry mode). Additionally, Smith and Stulz (1985) found that mergers achieve results that are similar to hedging results. Consequently, a company may wish to diversify the location of its production facilities internationally in order to mitigate the effect of exchange rate movements. This mitigation is possible because the company measures its cash flows in different currencies. Thus, exchange rate fluctuations in all currencies the company is exposed to can be naturally offset as can, consequently, the gains or losses while the company still reacts competitively. Diversification in financing is achieved by raising funds in more than one capital market and in more than one currency  [12]  . This method allows the company to reduce future cash-flow variability, to increase capital availability and to reduce costs, as well several risks, such as political risks. Allayannis et. al. (2001) observed that companies with geographical dispersion are more likely to use financial hedging strategies to lower their foreign exchange risk exposure. Accordingly, the use of exclusively operational hedging does not increase the companys value. However, if companies combine operational and financial hedging they will improve their value and, consequently, reduce exposure to foreign exchange risks. Companies can also adopt proactive policies (including operating and financing policies) to offset anticipated foreign exchange risk exposures. These policies allow a partial management of this exposure. The most generally employed are  [13]  : matching currency cash flows, risk-sharing agreements, back-to-back loans, currency swaps, leads and lags and reinvoicing centers. [Eitman, Stonehil and Moffett (2010)]. Transaction Exposure Transaction exposure measures gains or losses resulting from unexpected changes in future cash flows already contracted in a currency-denominated transaction [Martin and Mauer, 2005]. The uncertainty stems from the impact of exchange rate changes on the consolidated financial reports [Friberg and Ganslandt, 2007] and the fact that it is not anticipated in any line item of a financial statement [Eitman, Stonehil and Moffett, 2010]. Thus, the uncertainty can be the specific quantity of foreign currency or the timing of cash-flow [Moffet and Karlsen, 1994]. Transaction exposure approaches foreign exchange risk exposure in the short-term. It is therefore easier to identify and to measure, allowing a greater effectiveness of hedging strategies to be expected. Hedging Strategies The exposure to foreign exchange transactions can be hedged by contractual, natural, operating and financial hedges. The company, however, needs to determine its own risk tolerance and its expectations concerning the direction the exchange rates will assume. Contractual techniques include hedges in forward  [17]  , policies that imply proportional hedging. A natural hedge is basically an unhedged position where the transaction is left uncovered. Crabb (2004) suggests that this is not a very good hedge because it doesnt control variation over time and, consequently, companies cannot perfectly hedge their exchange rate exposure. An operating hedge means that the company will simply create an off-setting operating cash-flow (account payables, for instance). This hedge can also be implemented through several techniques, such as invoice currency, leads and lags in payment terms and exposure netting [Eun and Resnick, 2004]. Hedging through invoice currency allows the company to shift its foreign exchange risk exposure, invoicing foreign sales in home currency, or share foreign exchange risk exposure  [18]  , pro-rating the invoice currency between foreign and home currencies. Additionally, a company can also diversify its exposure to foreign exchange risks by invoicing sales in a market basket index [Eun and Resnick, 2004]. By hedging with leads and lags companies can accelerate or decelerate the timing of payments (receipts) made (received) in foreign currencies. This hedging strategy is efficient if a currency is expected to appreciate or depreciate against another [Eun and Resnick, 2004]. Finally, the technique of exposure netting suggests that a multinational company should not consider its deals in isolation, focusing rather on hedging the company in a portfolio of currency positions. This means that companies should consider overall payments (receipts) that must be done (received) after taking in account the opposite operations that naturally hedge each other. To use this technique some companies have re-invoicing centers, separate corporate subsidiaries that serve the parent or related unit in one location and all foreign subsidiaries. The reinvoicing center receives the invoice between the subsidiaries, taking legal title of the good that manufacturing plants sells to distribution subsidiaries of the same company, managing all foreign exchange transaction exposure for intracompany sales [Eun and Resnick, 2004]. Additionally, the reinvoicing centers can guarantee the exchange rate for future orders  and also manage intra-subsidiary cash flows [Eitman, Stone hil and Moffett (2010)]. Financial hedging refers to the creation of an off-setting financial cash flow by either borrowing or lending in the currency the company is exposed to. The company can use some type of proactive policies such as back-to-back loans and currency swaps. A back-to-back loan occurs when two companies in different countries coordinate themselves to borrow each others currency for a specific period of time. They then return the borrowed currencies at an agreed terminal date. By hedging via currency swap, the company and a swap dealer agree to exchange an equivalent amount in two different currencies (for instance, a company enters a swap paying yens and receiving dollars) for a specified period of time. The swap dealer assumes the role of a middleman. A matching currency cash flow proactive policy can act like a financial hedge or an operational hedge. The first alternative to offset a long-anticipated and continuous exposure to a particular currency (i.e., the Japanese Yen) is to acquire debt in that currency (in Yens). Suppose the following exposure: A US Corporation exports goods to a Japanese corporation. The inflow of the Japanese Yen creates a foreign currency exposure. An hedging technique requires that the debt payments in Japanese Yens, which consist of the principal and the interests paid by the US Corporation

The Powerful Message of It’s a Wonderful Life Essay -- Film, Movies

The Powerful Message of It’s a Wonderful Life It’s a Wonderful Life begins in the â€Å"party economy† of the 1920’s, during the rise of capitalism in America. The growth of economy and rapid technological advances during this post-war period lead to improvements in production and telecommunication, increasing the importance of financial markets. Allowing companies to make money by the sale of shares, financial markets opened ownership of companies to the public. In the 1920’s, when business was booming and many people were making money in the market, the public became very excited about the get-rich-quick opportunities they saw in a market they didn’t necessarily understand. When the ignorant public began throwing their money into the stock market on the unstable basis of margin buying, money in the market became inflated until the market eventually imploded. Numerous people, businesses and banks were financially ruined in the stock market crashes of 1929. Speculating heavily with their deposi ts, many banks were totally wiped out during the crash of 1929, which created a run on the banking system. The crashes, along with other social, political and economic disasters, provoked the Great Depression. The Great Depression is the backdrop for It’s a Wonderful Life, and although the film does not delve deeply into the economics of the depression, it influences and affects every aspect of the movie. The first major impact the depression has on Bedford Falls is the run on the bank. Everyone in town is in a panic because of the market crash, and fearful that they may lose all of their money in the Savings and Loan, the public rushes to the bank in an attempt to retrieve it. Fortunately, the Savings and Loan was not financially ruined i... ... the quality of life change with George’s existence. Nick lives in Potter’s field and works as a bartender in Pottersville. He is a mean and cynical old man. In Bedford Falls, Nick had lived in Bailey Estates and had owned the bar with help from the Savings and Loan. He was a caring family man. The importance of balance of powers within a single community is evident when examining the two scenarios. George Bailey fights on the side of the people in Bedford Falls. He sacrifices himself and his future a number of times in order to raise the standard of living. Keeping the Bailey Savings and Loan in business saves the town from Potter’s monopoly and the subsequent transformation of Bedford Falls. It’s a Wonderful Life is not only a story about one man’s impact on the lives of others, but also a glimpse of how a town can transform under different economic scenarios.

Causes and Effects of the Civil War Essay -- essays research papers

  Ã‚  Ã‚  Ã‚  Ã‚  Did you know America’s bloodiest battle fought on their own soil was the Civil War? The Civil War was fought on American soil between the northern states and the southern states. Many causes provoked the war, which would affect the nation for decades to come. Slavery, the Missouri Compromise, and John Brown’s attack on Harpers Ferry, Virginia, were some of the many causes. In turn hundreds of thousands of soldiers died, the South’s economy was devastated, and the northern ideals flourished.   Ã‚  Ã‚  Ã‚  Ã‚  In the later 1700’s to 1863, slavery was an intricate part of the South. Slaves were needed for plantation work like planting, caring for, and harvesting crops to maintaining the land. After Eli Whitney invented the cotton gin, more slaves were needed to keep up with the increased cotton production. In the South their belief was African-Americans were property. On the other hand, the North’s economy was based on industry and manufacturing powered by European immigrants. They believed slavery was wrong and inhumane and African-Americans are just as human as everybody else. These two different views are one of the major reasons that led to the Civil War.   Ã‚  Ã‚  Ã‚  Ã‚  Americans in the early nation agreed that slavery was legal south of the Ohio River and illegal north of the Ohio River. However, in 1819 the issue came up should Missouri be admitted to the union as a slave state or a non-slave state since Missouri ...

a russian way :: Free Essay Writer

In 1890 there was the Triple Alliance which was an agreement among Germany, Austria-Hungary and Italy to help each other under certain circumstances. The Germans also had a secret Re-Insurance Treaty with Russia to ensure that they never had to fight a war on two fronts. Neither France nor Britain were members of these agreements. In 1893 the Germans refused to renew the Re-Insurance Treaty with Russia, preferring closer links with Austria-Hungary. In 1894 Russia and France came together in an alliance backed up by financial, industrial and military help. Germany now found herself surrounded by potential enemies and having to face the real possibility of fighting a war on two fronts. Faced with this threat the German General Staff began to plan for a war against both France and Russia and this eventually became the Schlieffen Plan with its emphasis on speed and the need to invade neutral Belgium. France and Germany were bitter enemies because of France's defeat in the war of 1870-71 and the resulting loss of Alsace and Lorraine to Germany. Their bitterness was worsened by the actual defeat of 1870, the Siege of Paris and the German march down the Champs Elysee. Britain was isolated in 1890. She had no allies or even friends on the continent. She had quarrelled with France over colonies in Africa and with Russia over a possible Russian threat to Persia and India. The Boer War of 1899-1902 showed how dangerous it was for Britain to have to friends on the continent. The Germans refused to sign an agreement with Britain and so Britain settled her differences with France in the Entente Cordiale of 1904 This agreement was not an alliance but simply an agreement not to quarrel any more about colonies in Africa and North America but growing tension with Germany especially after two crises in Morocco in 1905 and 1911 led to a secret military agreement in 1909 and a secret military agreement in 1912. These agreements which were only known to very few senior members of the government committed Britain to sending an army to France (BEF) in the event of war with Germany and after 1912 the Royal Navy agreed to defend Calais and the other French Channel ports from a German attack. In 1906 the new British super battleship, HMS Dreadnought, was launched. This had more and bigger guns than any other ship in the world and it was faster and better armoured as well.