Exchange rate

chosen the Social Exchange Theory to represent our situation. The authors of the Social Exchange Theory are Kelley and Thibaut. The premise of the Social Exchange Theory, is that we as people, “like relationships with persons who are rewarding and avoid those that are unreasonably costly; people evaluate their relationships with others in terms of the outcome” (Lee, 2016). According to Heath & Bryant (2000), “Social exchange theory features a process that is analogous to monetary exchange”…

Two individuals named Janice and Sean have decided to participate in a dating interview in order to be paired with another individual. They both ended up getting paired together after the process is over. During Janice’s interview, she describes herself as a foodie and enjoys cooking in her spare time. She becomes inspired when she watches cooking shows on television and later will put the recipes to the test in the kitchen. Her favorite meal to cook it pasta especially different flavors of…

near zero percent interest rates. This is partly due to the globalisation of financial markets and that overseas economies are in no shape whatsoever to withstand higher interest rates. Meanwhile, in recent weeks, it has become increasingly evident that Fed Chair Yellen is keen to avoid her legacy being judged as a disappointment via her inability to raise the federal funds rate. She has duly taken note of the failures of other central banks to raise their policy rates away from zero. As…

initial public offering to raise capital (The Economist Times). According to the U.S. Securities and Exchange Commission, stocks are a type of security that give stockholders a share of ownership in a company. Investors buy stocks for different reasons but primarily because of capital appreciation, dividend payments, and the ability to vote shares and influence the company (U.S. Securities and Exchange Commission). There are different reasons why companies issue stocks and they are to get…

then records their heart rate before and for so long after the period. This shows how fit and healthy the heart is by showing how long it takes for the heart to go back to a regular resting pulse rate. “The cardiovascular response to acute exercise is centred on the principle that the cardiovascular system fulfils three primary functions: to deliver nutrients and oxygen to cells of the body’s tissues, to remove metabolites from the same sites and to regulate heat exchange…

the modifications of exposure to interest rate. Considering the business of GM has both sides of demand and supply, interest rate changes such as an increase may lead to increased borrowing costs on the part of the General Motors. Interest rates increases may also cause hiked auto loans on the part of consumers and this in turn causes a decreased demand. On the part of GM, this latter effect causes reduced sales revenues. Additionally, increased interest rate causes increased prices as charged…

to match the goals of the investor. Through analyzing the different classes of risk, one can match investments to an investors risk tolerance and return requirements. While some investments may present greater risk they are countered by a higher rate of return and vice versa, less risk corresponds to a lower return. Moreover, investment risk can be substantially reduced through diversification, which spreads a portfolio across different industries, businesses and investment options. The…

Portfolio rebalancing model is powerful to explain the exchange rate and equity returns by Hau (2004). Based on the portfolio balance approach, M.Gelman et al. (2015) found a new approach to estimate the correlation between foreign exchange rates, asset prices and capital flows. They showed a long-run equilibrium between REFER and NFH. According to this new equilibrium, there is an equilibrium relationship between the stock of assets held by international investors and the asset prices. The…

with high return as well as the low risk with lower return. The risk can be classified into two types which are systematic (uncontrollable) risk and unsystematic (controllable) risk. The examples of systematic risk are the interest rate risk, inflation risk, foreign exchange risk, country risk, political risk and market risk. Meanwhile, the example of unsystematic risk is business risk, liquidity risk and credit risk. However, all this risk can be diversified which by creating a well-diversified…

(2) Discount rates and (3), Reserve supply. In discussing open market operations, we must first establish that this tool is not so much the enforcement of policy as it is a process to maintain market continuity. The vast majority of open market operations are not intended to carry out changes in monetary policy. Instead, open market operations are conducted on a daily basis to prevent technical, temporary forces from pushing the effective federal funds rate too far from the target rate. The…