Foreign Currency Exposures of Medco Essay Example | Topics and Well Written Essays - 2000 words - 1

Foreign Currency Exposures of Medco - Essay Example This paper illustrates that money market hedging strategy is mainly based upon channelizing the interest rate exposures of the currencies involved i.e. the home currency and the foreign currency. Under the existing scenario, home currency is Pounds whereas the foreign currency is Euros. This strategy has the reciprocal way of dealing with the foreign currency risk in receipt and payment case. As the existing case is the receipt case, therefore, Borrow-then-invest strategy is followed. From the below-mentioned table, it can be viewed that at the first step an amount equivalent to the amount receivable in 6 months i.e. â‚ ¬500,000 are borrowed at an interest rate of 2% per annum equivalent to 1% semi-annually. The amount received from a bank is immediately converted into the amount in pounds at the spot rate of 1.2834 producing a sum of  £385,733. This amount is then invested at a rate of 4% per annum equivalent to 2% semi-annually thus producing a sum  £393,477. Forward exchang e rate hedging is mainly based upon the mechanism of locking in a pre-determined future rate at today’s rate. In another rate, when the invoice amount will be remitted, the exchange rate will not be the spot rate after 6 months rather the exchange rate will be the rate determined today i.e. forward rate. In the existing scenario, the fixed forward for 6 months is 1.2755. After 6 months, when the amount is remitted, â‚ ¬500,000 will be converted at 1.2755 which is the forward rate determined 6 months earlier and will generate a sum of  £392,003. In this way, whether the home currency is appreciated or depreciated against the foreign currency, Medco will take the forward rate as the fixed rate and either the loss or the gain will be the sole liability of the forward rate dealer. From the above two techniques, it is quite evident that the money market hedging strategy is going to yield in a higher amount i.e.  £393,447 as compared to the forward rate based hedging strateg y which will yield in  £392,003. In this way, it can be noted that money market hedging based seems more effective given the interest rates and other factors remains constant. The Board of Directors of Medco is advised to follow money market-based hedging strategy, as the same will earn a marginal benefit of  £1,444 to the company. However, the arrangement of money market hedging will require substantial efforts of management in fulfilling the requirements of the bank providing this money market hedging facility to Medco.

Cultures Essay Example | Topics and Well Written Essays - 1250 words

Cultures - Essay Example In small settlements in particular, where traditions, customs and beliefs are more influential, death is a concept that reinforces social solidarity. Death, which is seen as a person's physical disappearance although he continues to live on in spirit, is generally a terrifying phenomenon. With the subconscious pressure created by this fear, a number of events or manifestations are interpreted as omens of impending death, including unexpected forms of behaviour, objects being used in a particular way, meteorological events (a shooting star, thunder, northeast wind, etc.), the behaviour of animals and noises made by them (the howling of dogs, the hooting of owls, a rooster crowing at the wrong time, etc.), dreams (of coffins, wedding dresses, wedding-festivities, camels, houses being demolished, falling teeth, onions, pepper etc.), as well as physiological and psychological changes (someone's growing pale, an increase or decrease in appetite, staring fixedly at one point, etc.) in the sick person. People tend to avoid events that are thought to trigger the process of death. Among the ways this is done is to slaughter the rooster that crows at an inappropriate time, giving some food that has prepared at home or bought outside to the poor if one sees a bad dream, describing that dream to water, waking up pregnant women or children if they are asleep when a dead person is taken away, emptying water cups in the home where there is a funeral, sweeping the home after the deceased has been taken away, turning cauldron in which the water used for washing the dead has been boiled upside down. In beliefs of people, among symptoms that predict death, which related with animals have been taking a great and importantplace. Some talents of animals, which are absent in human beings, their power of intuition, physical characteristics, their consideration of being fortunate or ill-omened have been playing great role in creation of such beliefs and their reaching a universal line. Basically there lays also the fear of death on the foundation ofa certain amount of beliefs which are accumulated around home, household, tool, apparatuses and food; and they have been qualified by people usually as symptoms of death. Most of these beliefs are completely different to what we in Western Cultures believe. Someone who was fairly new to the Turkish Muslim religion may consider their beliefs as rather strange, yet quite fascinating. 3 The first practices regarding sending the deceased off include washing the body and enshrouding it within fixed rules. If the deceased was a woman, she is washed by other women and by men if the dead person was male. Washers are experienced and well-versed in the rules. In villages, the body is washed inside the house or on a bench reserved for this purpose in the garden, and few people are allowed to be present. When the deceased is washed, the relatives pour a bowl of water over the body, give their consent and ask the deceased for whatever they have shared in the past. In big cities, the deceased is washed in a room reserved for this purpose in the cemetery. The piece of cloth used as a shroud is always white. The shroud for women has more parts to it than that used for men. As a female corpse is wrapped in the shroud, henna (this may also be applied to her