The Camera Essay Example for Free

The Camera Essay It was a hot summer July afternoon in Key West, Florida with my family. We were on our first family vacation in a long while. All of us were standing in the ocean water watching the trainer directing the dolphin to do tricks. She each let us interact individually with the dolphin. It was one of the best feelings ever to just be so close to this gentle creature. It was one of the most memorable experiences of my life that I never want to forget. How would I remember this exact moment in time? Photography is simply the answer. Photographs were taken during the whole time of this event. I can always look back at these photos and not forget one detail. In the words of Jim Jonnard, who is the founder of the Red digital camera system, â€Å"The camera is arguably one of the most important of all inventions†¦it is he single tool that has the ability to stop time, record history, generate art, tell stories, and communicate messages that transcend language like nothing else ever conceived. † (Red Camera) I agree with this statement and the depth within it. The way it changed art is still unexplainable with its eternal lasting impact. The invention of the camera was completely necessary in order for original art to grow and change its direction throughout history and present time. (Berger 16-20) When the camera was first invented it immediately changed how people saw. This was first depicted in paintings. It had taken away the uniqueness of paintings by conveying a different message. When looking at a painting on a screen its surroundings include but are not limited to furniture and the appearance of the walls in the background. This interferes with the true meaning of the image because its environment is causing a distraction to its viewers. Instead of the viewer finding its way to the painting, the painting makes its way to the viewer. The whole meaning changes in its path. This is when the power of the camera took over and became a whole new way of art. (Berger 16-20) Not much concern was put towards how the camera would affect artists and their work. At first they panicked. Adapting to this constant changing world with an art career wasn’t a quick adjustment for them. During the time of the 1830’s which was when the camera was invented was also the era where portraits were a huge deal. Artists felt this pressure through their commissioned portraits. This was the main job of most artists. Many of them didn’t view the camera as a positive attribute to their work. When the camera was introduced to society, people soon realized that it’d be a lot less money and more time efficient to just get photographs taken of them instead. The emergence of â€Å"starving artists† became quite popular. Artists started losing hope with their way of thinking that art had died. (Mcrae) However this art depression didn’t last too long. They were able to shift this downfall into something completely unique and out of the ordinary. Instead of just focusing on portraits that had to be â€Å"true to life,† they looked to paint new subjects, experimenting what could work. They started painting the everyday, working class people exposing the secrets of society. This lead to the development of Cubism, Impressionism, modern art, and even abstract art. To make their pieces unique they added elements that the camera could not obtain. They wanted spectators to know the original. Little did the artists know that photography became a whole new art in itself, opening a door of fresh inspiration. It all began with the camera teaching them realism which allowed artists to see the juxtaposition of things that are real and not. A new perspective was quickly attained and applied. At first painters had to create this concept of realism. Now they just had to arrange and capture. (Lane) Also, artists now didn’t have to sketch the image being created in front of their subject. They could just use a snapshot as a reference instead of having added pressure from the subjects they were surrounded by. This allowed for more detailed and intricate pieces to be created. Now artists had the opportunity to express themselves. Becoming interested in how the camera worked light became the main focus. Light was meant almost everything in art. it was used to depict the mood, theme and even taught the viewer how to feel after looking at a painting. Lighting had such a strong power and artists didn’t even realize this until the invention of the camera. Once again, the realism that photographs portrayed taught the artists how to do their work in a whole new way. Light reflected off of objects passes through the lens of the device, burning an image onto film. Artists made that same connection with humans. Through the human eye, light reflects off of objects and passes through the eye burning an image onto the retina. This concept really intrigued artists, applying the properties of light to their own paintings. (Kenny) I think this was an overwhelming time for artists. They were used to art as being a depiction of one of their creative envisions. Now there was this device that stopped moments in time which caused them to focus on reality. They had to adapt to producing pieces that were exactly as seen. I agree that this can be a difficult concept to grasp especially when taught something a specific way. (Berger 16-20) Now that it is clear that the invention of the camera first influenced art such as in paintings, it also created a whole new classification of art through the video camera. Why just take a snapshot in time when you can record what is actually occurring right in front of you? The art of cinema and theatre were born, showing a side of art that no one had ever seen before. Photographing motion picture just seemed unrealistic and nearly impossible to society at the time, but they were so wrong. It was the gateway to visual media. Changes and developments in the art world highly influenced visual artists, photographers, and film makers. Willie Varela, in The Journal of Film and Video quotes that, â€Å"filmmakers who started working after World War II constituted a movement as powerful and significant as the abstract expressionists in paintings. † These two types of arts worked hand in hand with each other. The ideas that these expressionist painters were able to gain from photography contributed to the growth and success of film making. Through this they were both able to have an extreme impact on each other, leading to the growth of the relationship between art and audience. (Tenney) Film was another way of communicating to society just as photographs and paintings did. This all goes back to the creation of the camera which just proves the point that it was completely necessary in order for art to prosper. It first influenced paintings and then progressed to even more especially motion picture. Videoing moments in time are such a crucial part of today’s society. I don’t think most people realize how much it’s used in their everyday lives. It is used for so many things such as television and movies but most importantly for communication. (Tenney) I feel that both photography and film are so important. It’s what helped to advance society in its major aspects. To me art was the first one, but through the camera a door opened revealing a whole new level of creativity. Society would not nearly be as advanced as it is today without this invention. A life without the camera seems impossible. It gave way to an innovative way of art that was created that ended up changing how people saw for a lifetime. A picture is worth more than just a thousand words.

The Perpetuation of Subordination - Challenges to Aboriginal Employmen

The discussion of a hidden curriculum (Eisner, 1985; Jackson 1968) wherein students learn more in the public school system than what the direct or written curriculum intends - or intentionally leaves out - is oddly appropriate in the context of looking at the experience of the Aboriginal working-age populations in Canada. Bowles and Gintis (1976) suggest that schools maintain the dominant capitalist system of mainstream society due to particular social relations taking place in school communities. If public education in Canada is not correcting historical and social biases, it perpetuates prejudice and the placing of Aboriginal peoples at a lower social standing in Canada. How then are they expected to be successful in avenues like the employment market? Jean B. Miller’s discussion of the dominant/subordinate issue between men and women (1995) is an excellent template to analyze the plight of Aboriginals and employment obstacles in Canada. Aboriginals have been subordinat e to the colonizing powers for centuries. Morrison (1995) outlines many barriers to diversity in the workplace, but â€Å"the single most frequently mentioned barrier is prejudice† (235). It is no surprise then that despite recent gains in education-level completion, Canada’s Aboriginal populations are not seeing corresponding gains in employment. The last four centuries of Canadian history have seen many dark periods for the experiences of First Nations, Inuit, and Mà ©tis. Topics such as treaty disputes, the residential school system, armed stand-offs over territories, or disease, substance abuse, and the situation on reserves dominate provincially recommended textbooks. These discussions of their past, however, contain little to no Aboriginal perspective. ... ...tagne, F. (2004) The Aboriginal Workforce: What Lies Ahead - CLBC Commentary. Ottawa, Canada Labour and Business Centre. Mendelson, M. (2004) Aboriginal People in Canada’s Labour Market: Work and Unemployment, Today and Tomorrow. Ottawa, Caledon Institute of Social Policy Miller, Jean B. (1995). Domination/Subordination. In Wren, J. Thomas (Ed) The Leaders Companion: Insights on Leadership Through the Ages. (pp. 222-230) The Free Press: USA. Morrison, Ann M. (1995). Challenging the Barriers to Opportunity. In Wren, J. Thomas (Ed) The Leaders Companion: Insights on Leadership Through the Ages. (pp. 231-242) The Free Press: USA. Saul, J. R. (2008). A Fair Country: Telling truths about Canada. Toronto: Penguin. Thomas, R. R. (1990) From Affirmative Action to Affirming Diversity. Harvard Business Review. March-April, pp. 107-117.

Shapter 4 Global Finance Essay

Topics to Stimulate Class Discussion 1. Why are MNCs affected by exchange rate movements? 2. Why did exchange rates change recently? 3. Show the class a current exchange rate table from a periodical—identify spot and forward quotations. Then show the class an exchange rate table from a date a month ago, or three months ago. The comparison of tables will illustrate how exchange rates change, and how forward rates of the earlier date will differ from the spot rate of the future date for a given currency. 4. Make up several scenarios and ask the class how each scenario would, other things equal, affect the demand for a currency, the supply of a currency for sale, and the equilibrium exchange rate. Then integrate several  scenarios together to illustrate that in reality other things are not held constant, which makes the assessment of exchange rate movements more difficult. Critical Debate: The currencies of some Latin American countries depreciate against other currencies on a consistent basis. How can persistently weak currencies be stabilized? Proposition: The governments of these countries need to increase the demand for their currency by attracting more capital flows. Raising interest rates will make their currencies more attractive to foreign investors. They also need to insure bank deposits so that foreign investors who invest in large bank deposits do not need to worry about default risk. In addition, they could impose capital restrictions on local investors to prevent capital outflows. Opposing view: The governments of these countries print too much money because they make too many promises to the electorate that would otherwise have to be funded by higher taxes or borrowing at high interest rates. Printing money is the easy way out; but prices rise, exports decrease and imports increase. Thus, these countries could relieve the downward pressure on their local currencies by printing less money and thereby reducing the money supply and hence inflation. The outcome is likely to be a temporary reduction in economic growth and business failures. Higher interest rates would merely increase inflation. Reply: Solutions that cause riots are not very clever. With whom do you agree? Which argument do you support? Offer your own opinion on this issue. ANSWER: There is no perfect solution, but recognize the tradeoffs. The proposal to raise interest rates is not a good solution in the long run, because it will cause higher loan rates, and may slow down the economies in the long run. Effective anti-inflationary policies are needed to prevent further depreciation. However, the elimination of inflation that is caused by a wage-price spiral may cause some pain among the workers in the country,  as some form of wage controls may be needed. The government has various means of reducing inflation, but all of them can have adverse effects on the economy in the short run. As intimated in the question, inflation is a form of taxation, another way in which governments can raise money and inevitably reduce the value of ones earnings. Where governments are corrupt or have a poor control over the economy, inflation may be the only reliable way of â€Å"taxing†. In terms of economic welfare, the question is perhaps who suffers from inflat ion and a depreciating currency, perhaps not so many as long as the inflation is predictable. Answers to End of Chapter Questions 1. Percentage Depreciation. Assume the spot rate of the US dollar is  £0.54. The expected spot rate one year from now is assumed to be  £0.51. What percentage depreciation does this reflect? ANSWER: ( £0.51 –  £0.54)/ £0.54 = –5.55% Expected depreciation of 5.55% percent 2. Inflation Effects on Exchange Rates. Assume that the UK inflation rate becomes high relative to euro inflation. Other things being equal, how should this affect the (a) UK demand for euros, (b) supply of euros for foreign currency, and (c) equilibrium value of the euro? ANSWER: Demand for euros should increase (euro prices cheaper), supply of euros for sale should decrease ( £ prices more expensive), and the euro’s value should increase (supply and demand). 3. Interest Rate Effects on Exchange Rates. Assume euro interest rates fall relative to British interest rates. Other things being equal, how should this affect the (a) euro demand for British pounds, (b) supply of pounds for sale, and (c) equilibrium value of the pound? ANSWER: Demand for pounds should increase, supply of pounds for sale should decrease, and the pound’s value should increase. 4. Income Effects on Exchange Rates. Assume that the income level in the euro area rises at a much higher rate than does the UK income level. Other things being equal, how should this affect the (a) euro area demand for British  pounds, (b) supply of British pounds for sale, and (c) equilibrium value of the British pound in terms of the euro? ANSWER: Assuming no effect on interest rates, demand for pounds should increase, supply of pounds for sale may not be affected, and the pound’s value should increase. 5. Trade Restriction Effects on Exchange Rates. Assume that the Japanese government relaxes its controls on imports by Japanese companies. Other things being equal, how should this affect the (a) UK demand for Japanese yen, (b) supply of yen for sale, and (c) equilibrium value of the yen? ANSWER: Demand for yen should not be affected, supply of yen for sale should increase, and the value of yen should decrease. 6. Effects of Real Interest Rates. What is the expected relationship between the relative real interest rates of two countries and the exchange rate of their currencies? ANSWER: The higher the real interest rate of a country relative to another country, the stronger will be its home currency, other things equal. 7. Speculative Effects on Exchange Rates. Explain why a public forecast about the future value of the euro and about future interest rates by a respected economist could affect the value of the euro today. Why do some forecasts by well-respected economists have no impact on today’s value of the euro? ANSWER: Interest rate movements affect exchange rates. Speculators can use anticipated interest rate movements to forecast exchange rate movements. They may decide to purchase securities in particular countries because of their expectations about currency movements, since their yield will be affected by changes in a currency’s value. These purchases of securities require an exchange of currencies, which can immediately affect the equilibrium value of exchange rates. If a forecast of interest rates by a respected economist was already anticipated by market participants or is not different from investors’ original expectations, an announced forecast does not provide new information. Thus, there would be no reaction by investors to such an announcement, and exchange rates would not be affected. 8. Factors Affecting Exchange Rates. What factors affect the future movements  in the value of the euro against the dollar? ANSWER: The euro’s value could change because of the balance of trade, which reflects more U.S. demand for European goods than the European demand for U.S. goods. The capital flows between the U.S. and Europe will also affect the U.S. demand for euros and the supply of euros for sale (to be exchanged for dollars). 9. Interaction of Exchange Rates. Assume that there are substantial capital flows among the United Kingdom, the United States, and the Euro area. If interest rates in the United Kingdom declines to a level below the U.S. interest rate, and inflationary expectations remain unchanged, how could this affect the value of the euro against the U.S. dollar? How might this decline in the United Kingdom’s interest rate possibly affect the value of the British pound against the euro? ANSWER: If interest rates in the UK decline, there may be an increase in capital flows from the UK to the U.S. In addition, U.S. investors may attempt to capitalize on higher U.S. interest rates, while U.S. investors reduce their investments in UK’s securities. This places downward pressure on the pond’s value. Euro investors who previously invested in the UK may shift to the U.S. Thus, the increased demand for dollars by euros may increase the value of the dollar in relation to the euro. 10. Trade Deficit Effects on Exchange Rates. Every month, the UK trade deficit figures are announced. Foreign exchange traders often react to this announcement and even attempt to forecast the figures before they are announced. a. Why do you think the trade deficit announcement sometimes has such an impact on foreign exchange trading? ANSWER: The trade deficit announcement may provide a reasonable forecast of future trade deficits and therefore has implications about supply and demand conditions in the foreign exchange market. For example, if the trade deficit was larger than anticipated, and is expected to continue, this implies that the UK demand for foreign currencies may be larger than initially anticipated. Thus, the pound would be expected to weaken. Some speculators may take a position in foreign currencies immediately and could cause an  immediate decline in the pound. b. In some periods, foreign exchange traders do not respond to a trade deficit announcement, even when the announced deficit is very large. Offer an explanation for such a lack of response. ANSWER: If the market correctly anticipated the trade deficit figure, then any news contained in the announcement has already been accounted for in the market. The market should only respond to an announcement about the trade deficit if the announcement contains new information. 11. Comovements of Exchange Rates. Explain why the value of the British pound against the dollar will not always move in tandem with the value of the euro against the dollar. ANSWER: The euro’s value changes in response to the flow of funds between the U.S. and the countries using the euro or their currency. The pound’s value changes in response to the flow of funds between the U.S. and the U.K. As the UK economy is different from the euro economy, economic events will have a different impact, the events themselves may also differ. Assuming that the market is efficient and that the exchange rates do move according to relevant information the fact that the relevant information sets differ justifi es a less than perfect correlation of movements. That they are similar is understandable as although different, the differences are not that great. 12. Factors Affecting Exchange Rates. In the 1990s, Russia was attempting to import more goods but had little to offer other countries in terms of potential exports. In addition, Russia’s inflation rate was high. Explain the type of pressure that these factors placed on the Russian currency. ANSWER: The large amount of Russian imports and lack of Russian exports placed downward pressure on the Russian currency. The high inflation rate in Russia also placed downward pressure on the Russian currency. 13. National Income Effects. Analysts commonly attribute the appreciation of a currency to expectations that economic conditions will strengthen. Yet, this chapter suggests that when other factors are held constant, increased national income could increase imports and cause the local currency to weaken. In reality, other factors are not constant. What other factor is likely to be affected by increased economic growth and could place upward  pressure on the value of the local currency? ANSWER: Interest rates tend to rise in response to a stronger economy, and higher interest rates can place upward pressure on the local currency (as long as there is not offsetting pressure by higher expected inflation). 14. Factors Affecting Exchange Rates. If the Asian countries experience a decline in economic growth (and experience a decline in inflation and interest rates as a result), how will their currency values (relative to the British pound) be affected? ANSWER: A relative decline in Asian economic growth will reduce Asian demand for UK products, which places upward pressure on Asian currencies. However, given the change in interest rates, Asian corporations with excess cash may now invest in the UK or other countries, thereby increasing the demand for pounds. Thus, a decline in Asian interest rates will place downward pressure on the value of the Asian currencies. The overall impact depends on the magnitude of the forces just described. 15. Impact of Crises. Why do you think most crises in countries (such as the Asian crisis) cause the local currency to weaken abruptly? Is it because of trade or capital flows? ANSWER: Capital flows have a larger influence. In general, crises tend to cause investors to expect that there will be less investment in the country in the future and also cause concern that any existing investments will generate poor returns (because of defaults on loans or reduced valuations of stocks). Thus, as investors liquidate their investments and convert the local currency into other currencies to invest elsewhere, downward pressure is placed on the local currency. 16. How do you think weaker economic conditions would affect trade flows in a Developing Country? How would weaker conditions affect the value of its currency (holding other factors constant)? How do you think interest rates would be affected? ANSWER: Weak world economic conditions would result in a reduced demand for foreign products, wh ich results in a decline in the demand for foreign currencies, particularly the currencies of developing countries that rely on exports. Taking the US as the dominant economy there would therefore  be downward pressure on currencies relative to the dollar (upward pressure on the dollar’s value). The lower U.S. interest rates that accompany weaker economic conditions should reduce the capital flows to the U.S., which place downward pressure on the value of the dollar. Advanced Questions 17. Measuring Effects on Exchange Rates. Tarheel Co. plans to determine how changes in UK and euro real interest rates will affect the value of the British pound. a. Describe a regression model that could be used to achieve this purpose. Also explain the expected sign of the regression coefficient. ANSWER: Various models are possible. Based on the model above, the regression coefficient is expected to have a negative sign. A relatively high real interest rate differential would likely cause a weaker euro value, other things being equal. An appropriate model would also include other independent variables that may influence the percentage change in the peso’s value. b. If Tarheel Co. thinks that the existence of a quota in particular historical periods may have affected exchange rates, how might this be accounted for in the regression model? ANSWER: A dummy variable could be included in the model, assigned a value of one for periods when a quota existed and a value of zero when it did not exist. This answer requires some creative thinking, as it is not drawn directly from the text. 18. Factors Affecting Exchange Rates. Mexico tends to have much higher inflation than the United States and also much higher interest rates than the United States. Inflation and interest rates are much more volatile in Mexico than in industrialized countries. The value of the Mexican peso is typically more volatile than the currencies of industrialized countries from a U.S. perspective; it has typically depreciated from one year to the next, but the degree of depreciation has varied substantially. The bid/ask spread tends to be wider for the peso than for currencies of industrialized countries. a. Identify the most obvious economic reason for the persistent depreciation  of the peso. ANSWER: The high inflation in Mexico places continual downward pressure on the value of the peso. b. High interest rates are commonly expected to strengthen a country’s currency because they can encourage foreign investment in securities in that country, which results in the exchange of other currencies for that currency. Yet, the peso’s value has declined against the dollar over most years even though Mexican interest rates are typically much higher than U.S. interest rates. Thus, it appears that the high Mexican interest rates do not attract substantial U.S. investment in Mexico’s securities. Why do you think U.S. investors do not try to capitalize on the high interest rates in Mexico? ANSWER: The high interest rates in Mexico result from expectations of high inflation. That is, the real interest rate in Mexico may not be any higher than the U.S. real interest rate. Given the high inflationary expectations, U.S. investors recognize the potential weakness of the peso, which could more than offset the high interest rate (when they convert the pesos back to dollars at the end of the investment period). Therefore, the high Mexican interest rates do not encourage U.S. investment in Mexican securities, and do not help to strengthen the value of the peso. c. Why do you think the bid/ask spread is higher for pesos than for currencies of industrialized countries? How does this affect a U.S. firm that does substantial business in Mexico? ANSWER: The bid/ask spread is wider because the banks that provide foreign exchange services are subject to more risk when they maintain currencies such as the peso that could decline abruptly at any time. A wider bid/ask spread adversely af fects the U.S. firm that does business in Mexico because it increases the transactions costs associated with conversion of dollars to pesos, or pesos to dollars. 19. Aggregate Effects on Exchange Rates. Assume that the United Kingdom invests heavily in government and corporate securities of Country K. In addition, residents of Country K invest heavily in the United Kingdom. Approximately  £10 billion worth of investment transactions occur between these two countries each year. The total pound value of trade transactions per year is about  £8 million. This information is expected to also hold in the future. Because your firm exports goods to Country K, your job as  international cash manager requires you to forecast the value of Country K’s currency (the â€Å"krank†) with respect to the pound. Explain how each of the following conditions will affect the value of the krank, holding other things equal. Then, aggregate all of these impacts to develop an overall forecast of the krank’s movement against the pound. a. UK inflation has suddenly increased substantially, while Country K’s inflation remains low. ANSWER: Increased UK demand for the krank. Decreased supply of kranks for sale. Upward pressure in the krank’s value. b. UK interest rates have increased substantially, while Country K’s interest rates remain low. Investors of both countries are attracted to high interest rates. ANSWER: Decreased UK demand for the krank. Increased supply of kranks for sale. Downward pressure on the krank’s value. c. The UK income level increased substantially, while Country K’s income level has remained unchanged. ANSWER: Increased UK demand for the krank. Upward pressure on the krank’s value. d. The UK is expected to impose a small tariff on goods imported from Country K. ANSWER: The tariff will cause a decrease in the United Kingdom’ desire for Country K’s goods, and will therefore reduce the demand for kranks for sale. Downward pressure on the krank’s value. e. Combine all expected impacts to develop an overall forecast. ANSWER: Two of the scenarios described above place upward pressure on the value of the krank. However, these scenarios are related to trade, and trade flows are relatively minor between the UK and Country K. The interest rate scenario places downward pressure on the krank’s value. Since the interest rates affect capital flows and capital flows dominate trade flows between the UK and Country K, the interest rate scenario should overwhelm all other scenarios. Thus, when considering the importance of implications of all scenarios, the krank is expected to depreciate. 20. Speculation. Blue Demon Bank expects that the Mexican peso will depreciate against the dollar from its spot rate of $.15 to $.14 in 10 days. The following interbank lending and borrowing rates exist: U.S. dollar Mexican peso Lending Rate 8.0% 8.5% Borrowing Rate 8.3% 8.7% Assume that Blue Demon Bank has a borrowing capacity of either $10 million or 70 million peos in the interbank market, depending on which currency it wants to borrow. a. How could Blue Demon Bank attempt to capitalize on its expectations without using deposited funds? Estimate the profits that could be generated from this strategy. ANSWER: Blue Demon Bank can capitalize on its expectations about pesos (MXP) as follows: 1. Borrow MXP70 million 2. Convert the MXP70 million to dollars: MXP70,000,000 Ãâ€" $.15 = $10,500,000 3. Lend the dollars through the interbank market at 8.0% annualized over a 10-day period. The amount accumulated in 10 days is: $10,500,000 Ãâ€" [1 + (8% Ãâ€" 10/360)] = $10,500,000 Ãâ€" [1.002222] = $10,523,333 4. Repay the peso loan. The repayment amount on the peso loan is: MXP70,000,000 Ãâ€" [1 + (8.7% Ãâ€" 10/360)] = 70,000,000 Ãâ€" [1.002417]=MXP70,169,167 5. Based on the expected spot rate of $.14, the amount of dollars needed to repay the peso loan is: MXP70,169,167 Ãâ€" $.14 = $9,823,683 6. After repaying the loan, Blue Demon Bank will have a speculative profit (if its forecasted exchange rate is accurate) of: $10,523,333 – $9,823,683 = $699,650 b. Assume all the preceding information with this exception: Blue Demon Bank expects the peso to appreciate from its present spot rate of $.15 to $.17 in 30 days. How could it attempt to capitalize on its expectations without using deposited funds? Estimate the profits that could be generated from this strategy. ANSWER: Blue Demon Bank can capitalize on its expectations as follows: 1. Borrow $10 million 2. Convert the $10 million to pesos (MXP): $10,000,000/$.15 = MXP66,666,667 3. Lend the pesos through the interbank market at 8.5% annualized over a 30-day period. The amount accumulated in 30 days is: MXP66,666,667 Ãâ€" [1 + (8.5% Ãâ€" 30/360)] = 66,666,667 Ãâ€" [1.007083] = MXP67,138,889 4. Repay the dollar loan. The repayment amount on the dollar loan is: $10,000,000 Ãâ€" [1 + (8.3% Ãâ€" 30/360)] = $10,000,000 Ãâ€" [1.006917] = $10,069,170 5. Convert the pesos to dollars to repay the loan. The amount of dollars to be received in 30 days (based on the expected spot rate of $.17) is: MXP67,138,889 Ãâ€" $.17 = $11,413,611 6. The profits are determined by estimating the dollars available after repaying the loan: $11,413,611 – $10,069,170 = $1,344,441 21. Speculation. Diamond Bank expects that the Singapore dollar will depreciate against the euro from its spot rate of 0.48 euros to 0.45 euros in 60 days. The following interbank lending and borrowing rates exist: Lending Rate euro Singapore dollar 7.0% 22.0% Borrowing Rate 7.2% 24.0% Diamond Bank considers borrowing 10 million Singapore dollars in the interbank market and investing the funds in euros for 60 days. Estimate the profits (or losses) that could be earned from this strategy. Should Diamond Bank pursue this strategy? ANSWER: Borrow S$10,000,000 and convert to euros: S$10,000,000 Ãâ€" 0.48 = 4,800,000 euros Invest funds for 60 days. The rate earned in the euros for 60 days is: 7% Ãâ€" (60/360) = 1.17% Total amount accumulated in 60 days: 4,800,000 euros Ãâ€" (1 + .0117) = 4,856,160 euros Convert euros back to S$ in 60 days: 4,856,160 /0.45 = S$10,791,467 The rate to be paid on loan is: .24 Ãâ€" (60/360) = .04 Amount owed on S$ loan is: S$10,000,000 Ãâ€" (1 + .04) = S$10,400,000 This strategy results in a profit: S$10,791,467 – S$10,400,000 = S$391,467 Diamond Bank should pursue this strategy. Blades plc Case Study As the chief financial officer of Blades plc Ben Holt is pleased that his current system of exporting â€Å"Speedos† to Thailand seems to be working well. Blades’ primary customer in Thailand, a retailer called Entertainment Products, has committed itself to purchasing a fixed number of Speedos annually for the next three years at a fixed price denominated in baht, Thailand’s currency. Furthermore, Blades is using a Thai supplier for some of the components needed to manufacture Speedos. Nevertheless, Holt is concerned about recent developments in Asia. Foreign investors from various countries had invested heavily in Thailand to take advantage of the high interest rates there. As a result of the weak economy in Thailand, however,  many foreign investors have lost confidence in Thailand and have withdrawn their funds. Ben Holt has two major concerns regarding these developments. First, he is wondering how these changes in Thailand’s economy could affect the value of the Thai baht and, consequently, Blades. More specifically, he is wondering whether the effects on the Thai baht may affect Blades even though its primary Thai customer is committed to Blades over the next three years. Second, Holt believes that Blades may be able to speculate on the anticipated movement of the baht, but he is uncertain about the procedure needed to accomplish this. To facilitate Holt’s understanding of exchange rate speculation, he has asked you, Blades’ financial analyst, to provide him with detailed illustrations of two scenarios. In the first, the baht would move from a current level of  £0.0147 to  £0.0133 within the next 30 days. Under the second scenario, the baht would move from its current level to  £0.0167 within the next 30 days. Based on Holt’s needs, he has provided you with the following list of questions to be answered: 1. How are percentage changes in a currency’s value measured? Illustrate your answer numerically by assuming a change in the Thai baht’s value from a value of  £0.0147 to  £0.0173. 2. What are the basic factors that determine the value of a currency? In equilibrium, what is the relationship between these factors? 3. How might the relatively high levels of inflation and interest rates in Thailand have affected the baht’s value? (Assume a constant level of UK inflation and interest rates.) 4. How do you think the loss of confidence in the Thai baht, evidenced by the withdrawal of funds from Thailand, affected the baht’s value? Would Blades be affected by the change in value, given the primary Thai customer’s commitment? 5. Assume that Thailand’s central bank wishes to prevent a withdrawal of funds from its country in order to prevent further changes in the currency’s value. How could it accomplish this objective using interest rates? 6. Construct a spreadsheet illustrating the steps Blades’ treasurer would need to follow in order to speculate on expected movements in the baht’s value over the next 30 days. Also show the speculative profit (in pounds) resulting from each scenario. Use both of Ben Holt’s examples to illustrate possible speculation. Assume that Blades can borrow either  £7 million or the baht equivalent of this amount. Furthermore, assume that the following short-term interest rates (annualized) are available to Blades: Currency Dollars Thai baht Lending Rate 8.10% 14.80% Borrowing Rate 8.20% 15.40% Solution to Continuing Case Problem: Blades. 1. How are percentage changes in a currency’s value measured? Illustrate your answer numerically by assuming a change in the Thai baht’s value from a value of  £0.0147 to  £0.0173. ANSWER: The percentage change in a currency’s value is measured as follows: % S St St 1 1 where S denotes the spot rate, and St 1 denotes the spot rate as of the earlier date. A positive percentage change represents appreciation of the foreign currency, while a negative percentage change represents depreciation. In the example provided, the percentage change in the Thai baht would be: = 17.69%  £0.0173 –  £0.0147  £0.0147 That is, the baht would be expected to appreciate by 17.69%. 2. What are the basic factors that determine the value of a currency? In equilibrium, what is the relationship between these factors? ANSWER: The basic factors that determine the value of a currency are the supply of the currency for sale and the demand for the currency. A high level of supply of a currency generally decreases the currency’s value, while a high level of demand for a currency increases its value. In equilibrium, the supply of the currency equals the demand for the currency. 3. How might the relatively high levels of inflation and interest rates have affected the baht’s value? (Assume a constant level of UK inflation and interest rates.) ANSWER: The baht would be affected both by inflation levels and interest rates in Thailand relative to levels of these variables in the UK. A high level of inflation tends to result in currency depreciation, as it would increase the Thai demand for UK goods, causing an increase in the Thai demand for dollars. Furthermore, a relatively high level of Thai inflation would reduce the UK demand for Thai goods, causing an increase in the supply of baht for sa le. Conversely, the high level of interest rates in Thailand may cause appreciation of the baht relative to the dollar. A relatively high level of interest rates in Thailand would have rendered investments there more attractive for UK investors, causing an increase in the demand for baht. Furthermore, UK securities would have been less attractive to Thai investors, causing an increase in the supply of dollars for sale. However, investors might be unwilling to invest in baht-denominated securities if they are concerned about the potential depreciation of the baht that could result from Thailand’s inflation. 4. How do you think the loss of confidence in the Thai baht, evidenced by the withdrawal of funds from Thailand, affected the baht’s value? Would Blades be affected by the change in value, given the primary Thai customer’s commitment? ANSWER: In general, a depreciation in the foreign currency results when investors liquidate their investments in the foreign currency, increasing the supply of its currency for sale. Blades would probably be affected by the change in value even though its Thai customer’s commitment, as the sales are denominated in baht. Thus, the depreciation in the baht would have caused a conversion of the baht revenue into fewer pounds. 5. Assume that Thailand’s central bank wishes to prevent a withdrawal of funds from its country in order to prevent further changes in the currency’s value. How could it accomplish this objective using interest rates? ANSWER: If Thailand’s central bank wishes to prevent further depreciation in the baht’s value, it would attempt to increase the level of interest rates in Thailand. In turn, this would increase the demand for Thai baht by UK investors, as Thai securities would now seem more attractive. This would place upward pressure on the currency’s value. However, the high interest rates could reduce local borrowing and spending. 6. Construct a spreadsheet illustrating the steps Blades’ treasurer would need to follow in order to speculate on expected movements in the baht’s value over the next 30 days. Also show the speculative profit (in dollars) resulting from each scenario. Use both of Ben Holt’s examples to illustrate possible speculation. Assume that Blades can borrow either  £10 million or the baht equivalent of this amount. Furthermore, assume that the following short-term interest rates (annualized) are available to Blades: Currency Dollars Thai baht Lending Rate 8.10% 14.80% Borrowing Rate 8.20% 15.40% ANSWER: (See spreadsheet attached.) Depreciation of the Baht from  £0.0147 to  £0.0133 1. Borrow Thai baht ( £10,000,000/0.0147) 2. Convert the Thai baht to pounds 680,272,109 bahtÃâ€"  £0.0147). 3. Lend the pounds at 8.10% annualized, which represents a 0.68% return over the 30-day period [computed as 8.10% Ãâ€" (30/360)]. After 30 days, Blades would receive ( £10,000,000 Ãâ€" (1 + .0068)) 4. Use the proceeds of the dollar loan repayment (on Day 30) to repay the baht borrowed. The annual interest on the baht borrowed is 15.40%, or 1.28% over the 30-day period [computed as 15.40% Ãâ€" (30/360)]. The total baht amount necessary to repay the loan is therefore (680,272,109 Ãâ€" (1 + .0128)) 680,272,109 10,000,000 10,068,000.00 688,979,592 5. Number of pounds necessary to repay baht loan (688,979,592 bahtÃâ€"  £0.0133) 9,163,429 6. Speculative profit ( £10,068,000 –  £9,163,429)  £904,571 Appreciation of the Baht from  £0.0147 to  £0.0167 1. Borrow pounds. 2. Convert the pounds to Thai baht ( £10 million/ £0.0147). 3. Lend the baht at 14.80% annualized, which represents a 1.23% return over the 30-day period [computed as 14.80% Ãâ€" (30/360)]. After 30 days, 10,000,000.00 680,272,109 Blades would receive (THB 680,272,109Ãâ€" (1 + .0123)) 4. Use the proceeds of the baht loan repayment (on Day 30) to repay the dollars borrowed. The annual interest on the dollars borrowed is 8.20%, or 0.68% over the 30-day period [computed as 8.20% Ãâ€" (30/360)]. The total dollar amount necessary to repay the loan is therefore ( £10,000,000 Ãâ€" (1 + .0068)) 5. Number of baht necessary to repay dollar loan ( £10,068,000.00/ £0.0167) 6. Speculative profit (THB688,639,456– THB602,874,251) 7. Dollar equivalent of speculative profit (THB 85,765,205Ãâ€" £0.0167) 688,639,456 10,068,000.00 602,874,251 85,765,205 1,432,278 Blades would be ill advised to speculate in this way as it is not a specialist in the financial markets and does not have specialist abilities or information to use. These actions are thyerfore little better than gambling and are highly ill advised. Small Business Dilemma Assessment by the Sports Exports Company of Factors That Affect the British Pound’s Value 1. Given Jim’s expectations, forecast whether the pound will appreciate or depreciate against the euro over time. ANSWER: The pound should depreciate because the British inflation is expected to be higher than the euro. This could cause a shift in trade flows that would place downward pressure on the pound’s value. The interest rate movements of both countries are expected to be similar for both countries. Therefore, there should not be any adjustment in the capital flows between the two countries. 2. Given Jim’s expectations, will the Sports Exports Company be favourably or unfavourably affected by the future changes in the value of the pound? ANSWER: The Sports Exports Company will be unfavourably affected, because depreciation in the British pound will cause the pound receivables to convert into fewer euros.

Representation of Citizens in Democracy - 1831 Words

One of the main arguments presented by Crick in In Defence of Politics is that politics is a realistic good necessary for well-organized governance. From my experiences in the field, I understand that democracy allows for differing interests and views to be heard in a diplomatic manner. While democracy elicits diverging ideas and opinions for people, citizens in a democratic state still understand their interests are often served through democratic values and equal representation in government affairs. Political representatives must be accountable to the masses for their actions and decisions in order for the rule of law to be obligatory. Democracy does not discriminate against ideology or party affiliation. During my internship,†¦show more content†¦Crick states, â€Å"Then others hold that, surprisingly enough, democracy ‘really means’ liberty, even liberalism, or even individualism, even to defend the (democratic) individual against the (democratic) majority † (In Defence of Politics 56). Liberty and freedoms to exercise individualism only occur in a democratic state that does not act in a tyrannical manner in which elites only serve their own interests. If government becomes too powerful and unwilling to meet the needs of the demos, the citizenry must be guarded and protect their own interests against the people who represent them. Otherwise, democracy cannot flourish and other forms of government, such as elitism or an oligarchy, become pervasive throughout society. Crick present Aristotle’s views on democracy and states that rule by the majority prevents tyranny and unequal representation. Democracy promotes freedom and inclusion, however, these liberties and freedoms are only promised when the masses are engaged and well-versed in political matters. The demos participate in liberty in order for their interests to be served. In theory, the United States has a representative democracy, one that elects individua ls to make decisions that affect the good of the electorate. Crick argues, â€Å"Politics, then, can be simply defined as the activity by which different interests within aShow MoreRelatedDemocracy And The Ideal Of Democracy877 Words   |  4 PagesUrbinati’s essay entitled Representative Democracy introduction compared what we call modern democracy to the ideal of democracy that was created by the Athenian people. The Athenian people had their ideal proscpective of how pure and direct democracy should be in a government. The people in Athens changed the government because they saw problems in the way that the government was being controlled. 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