Foreign Exchange Essay Example | Topics and Well Written Essays - 500 words

Foreign Exchange - Essay Example Looking at Table ll.1(Foreign Exchange Quotations, p.5) I see that the Monday 1-month forward for the Japanese yen, using the Direct Quote, is $0.009048 compared to the spot rate of .009035. The 3-month forward is .009074 and the 6-month forward is .009124. This means that the Japanese currency is expected to progressively appreciate during this period. The indirect quote column (Japanese currency calculated in US dollar terms) confirms the expected trend, showing that gradually it will require more dollars to pay for a fixed amount of Japanese yen. I use the spot rate when I need the currency immediately. I go to a lending institution or a bank to arrange for a forward exchange contract when I need to protect the value of the US dollar against the possibility that the Japanese yen will rise in value (appreciate), and it would require me to spend more money to purchase a product priced or denominated in that currency. In this particular case, if I have to purchase Y100,000 now, at the rate of $0.009035 per yen, the amount I have to pay will be $903.50, which is obtained by multiplying these two numbers. Since the 1-month forward rate is $0.009048, the amount of our contract with the bank will be $904.80, which is higher by $1.30. A month from now, I will obtain from the bank Y100,000 at this price. I can either buy Y100,000 now at the spot market price at the rate of 1 Yen = $0.009035 and hold the currency until a month from now when I need to use it for payment, or I can arrange a forward contract which, at $0.009048, is $1.30 higher. The forward contract will protect me in case the Japanese yen appreciates. For example, if the Japanese yen, contrary to market expectations, rises to $0.009200 (or, conversely, $1 = 108.70, obtained by computing its reciprocal - i.e., 1/.009200), I will need to pay $920.00 a month from now – or $16.50 higher - because I did not hedge my position by using the forward contract. This is also

Organizational Theory Design and Change Essay Example | Topics and Well Written Essays - 250 words - 4

Organizational Theory Design and Change - Essay Example Creativity deals with ideas going beyond the boundaries of technology, social norms, knowledge and beliefs. When these three elements combine in an organization, then creative destruction takes place in which old companies which use old conventional methods are thrown out of the competitive market and business and new industries emerge as a result. When an organization follows such strategies that encourage the entrepreneurs to utilize their creativity in developing new products or in improving the efficiency of the older ones, then they come up with new innovative ideas and hence new product with increased efficiency is introduced in the market which better address the needs of the clientele. This not only boosts the organization’s integrity but also add to its stability. Thus, these three elements are interrelated with each other and are considered to be vital for knowledge-creating organizations because such organizations needs innovation at all levels put forward by the cr eative entrepreneurs. This increases the entrepreneurs’ expertise, and guarantees the organization’s growth and increased productivity that eventually attracts clientele, results in better product outcomes, and creates good reputation in the market. Works Cited Jones, G. Organizational Theory Design and Change. NJ: Prentice Hall, 2009.