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Homes for the Elderly-Free-Samples for Students-Myassignmenthelp

Question: Basic think about the Scenario Elderly Abuse. Answer: Experience As per the article by David Lewis dated 27/9/2016, Mr...

Saturday, February 15, 2020

Hedging Essay Example | Topics and Well Written Essays - 750 words

Hedging - Essay Example There are various ways in hedge oneself from exchange rate risk by the use of financial derivative products, and a combination of strategies using these products. The three top runners for hedging purposes in exchange rates are Forward Contracts, Futures Contracts and Options. We’ll discuss the strategies which can be formed in each case, and then conclude which strategy would be most suitable for our current scenario. A forward contract or simply a forward is a non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed today. The most advantageous feature of a forward contract is that it costs nothing to enter into such an agreement. The difference between the spot and the forward price is the forward premium or forward discount, depending on the swap points of the currency pair involved. Forward contracts are traded over the counter, and are more customized for individual customers. Another feature of a forward contract is that there is no specific margin call mechanism. Since there is no cost of entering into this agreement, margin calls are non-existent in this type of trade. Moreover, it is not regulated by an exchange or clearing house, thus it does not involve the hassles which occur in such cases. However, a forward contract obligates the customer to deliver or take delivery of the underlying asset at the time of maturity. Failure to do so would result in a breach of contractual obligations and can lead to litigation. But we have to keep in mind that there is no guarantee that a customer will honor the contract. In our case, the Virtual Books can enter in to a forward contract to fix a forward price for its imports as well as repatriated profits. In the case of its import, if the forward price is less than the prevalent spot rate on the day of taking up that contract, he will be losing money on the contract. If the spot rate is lower than the agreed forward rate, then it will be gaining on t he contract. In case it’s relatively the same, Virtual Books will no gain nor lose. The reverse case applies for its repatriated profits in which he is selling Euros and receiving GBP. The next alternative in line is Futures Contracts. A futures contract is a standardized contract between two parties to buy or sell a specified asset of standardized quantity and quality at a specified future date at a price agreed today known as the futures price. A futures contract operates in ways similar to a forward contract; however, there are a few differences which make the two distinguishable. First of all, a futures contract is traded on an exchange. They are highly standardized and are backed by a clearing house. Unlike forwards, an initial margin must be put up with the clearing house as a form of collateral. Fluctuations in the price of the underlying asset will reduce or increase the outstanding initial margin of the buyer/seller. Once a minimum threshold has been hit, margin call s are made so as to deposit funds to meet the minimum margin levels. Futures are backed by the clearing house, so in case any party defaults, the other party will still be able to deliver/take delivery of the underlying asset. In the case of Virtual Books, if they enter into a futures agreement, they will go long in Euro Futures which will obligate them to buy EUR against the GBP. In the case of their repatriated profit

Sunday, February 2, 2020

Why does the United States have an inconsistent policy in the middle Essay

Why does the United States have an inconsistent policy in the middle east - Essay Example (1). Since independence in 1776, the United States of America has followed a policy in the Middle East that is marked by its independence from its colonial master in the form of the British, and the other European allied powers, like France. However, it is the American policy in the Middle East that is crucial to the region, because of the strong influence it has in the region, though it has been a late entrant to the happenings in the Middle East. There is strong criticism that the inconsistent policies followed by the Americans, marked by self-interest have had a strong influence on the poor state of affairs in the Middle East. (2) United States Policy in the Middle East since 1776 and its Reasons American policy in the Middle East has been more at loggerheads with the earlier influential colonial powers till around the formation of Israel. The growing economic might of America meant that it would have a strong influence on the course and consequences of the First and Second World Wars. Yet, even though the Americans went to war in Europe in favor of its allies, the then President of USA Woodrow Wilson refused to declare war against their enemy Turkey, despite the genocide that was occurring in Armenia, due to Turkish actions. (3). The Suez Crisis of 1956 is another marked example of the US differing with its European NATO allies on the Middle East. Britain and France believed that Nasser was inimical to the interests of the Western world. While America agreed with this evaluation, it was against any use of force against Nasser to prevent opening the door to the Soviets. America worked against British and French action. (4). America has thus demonstrated its desire for influence in the Middle East, even to the extent of upsetting its European NATO allies. This desire is a reflection of the self-interest that America has in the region. (2). The allurement for the Middle East for America is based on its national interests including control of a region with abun dance of oil. Yet, America has used diplomatic, economic or military power towards this end. In other words, economic appeasements and use of the military might have been the main weapons used by America to appease its national interests in the Middle East. This has led to the charge of inconsistencies in American policy in the Middle East. America has used economic and diplomatic means to draw to it national leaders with whom it believes it can deal with from strength and acted to use economic and military might to overthrow or marginalize national leaders that it does not like. Such inconsistent policy stems from its belief in its moral superiority that came with the â€Å"Pilgrims at Plymouth† and its attraction to an exotic Middle East that it sees as â€Å"the mysterious, menacing Orient†. (1). Israel in the Middle-east has been a fixture in American policy in the Middle East and the reason for its inconsistent policies in the Middle East that runs against its gra in of liberty and justice. The strong pro-Israeli has both political and religious basis. The political basis is reflected in the words of President during the formation of Israel and the strong American backing â€Å"I have to answer to hundreds of thousands who are anxious for the success of Zionism.† (1). This can be construed to mean that at there are many more Jews in America than Muslims from the Middle East. The religious entanglement in American policy in the Middle East comes from missionary zeal in attempting to change the Middle East to mirror its liberal and Christian values, such that the land that it is attracted to changes in its eyes for the better. (1). The political and religious basis of American policy i