...There has been a revolution in US business practices. Several factors have combined to force significant change to the US economy, and the resultant changes on company production costs/techniques and location has forced a bifurcation of the workforce and the business community. The United States has been drawn into the world economy, and as such must compete globally for sales of its goods and services. So too, the labor force, once the highest paid and most respected in the world, has been forced to compete with lower-cost labor sources worldwide. Add the economic malaise of 2007-2008, and the years 2006-2010 reflect an economic upheaval never seen before, or likely, since. This exercise tracks the exchange rate between the US dollar and the Canadian dollar over that period, and , the author believes, tracks closely the macroeconomic conditions between the two countries during the selected period of 2006-2010. This paper will show that a review of economic history, followed by a review of the exchange rates for the fund, (symbol FXC), will show a close correlation. 2006-2007 saw the end of boom economics for many Americans. Loose credit policies allowed stock and real estate prices to expand rapidly. Real estate speculators would execute options on new condominiums, only to flip those contracts to another purchaser for profit before the property was built. Several forces combined to threaten collapse of the US financial markets, from rogue traders making huge bets that threatened...
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...unemployment and the rise of the Canadian dollar? Canada’s financial stability depends on the health of America’s economy, as international trade accounts for 45% of Canada’s Gross Domestic Product (GDP) and 79% of exports are to the United States. Canadian and American unemployment rates are positively correlated for that reason, as exemplified in early 2009. Canada’s unemployment rate quickly steepened as the United States’ rate gradually increased to about 10% (refer to graph 1 and 2). During this time, Canada’s growing trade surplus became a deficit in only a few months (refer to graph 3). From this data, one can determine that Canada’s exports decreased rapidly due to rising economic turmoil in the United States. The effects on the dollar seemed to positively correlate. Canada’s dollar decreased in value compared to the US dollar; however, concluding that the reason for this change was due to the U.S. unemployment rate is inaccurate. The ever-changing exchange rate of the dollar is determined by many factors. As of 2011, Canadian and American unemployment rates remain high at approximately 7.3% and 9%, respectively. In addition, a trade deficit continues to exist in Canada. Nevertheless, the Canadian dollar is gaining strength over the American dollar, which contrasts with the weakened exchange rate in 2009 when the same conditions existed (refer to graph 4). Therefore, rising U.S. unemployment can have a positive or negative affect on the Canadian dollar. I will examine how the...
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...Canada from responding to a rapidly changing economic environment. Discuss what the weaknesses are and how they have hampered Canadian competitiveness. Finally, offer your own assessment, drawing on course materials, of this argument. There are numerous economic weaknesses that the author has argued. This essay mainly focuses on these flaws and how they are hampering Canadian competitiveness. Firstly majority of the companies in Canada are foreign owned or foreign controlled. From manufacturing sector including auto, chemical, and electronics to giant retail stores such as Wal-mart, Costco, Sears, Hudson Bay, etc are all foreign owned. In automobile sector GM, Ford, Chrysler, Toyota, Honda, etc dominates the auto industry in Canada. The automotive industry employs 158,302 people in automotive assembly and component manufacturing, and another 336,212 in distribution and aftermarket sales and service[1]. These foreign operated companies are extremely aggressive in nature, tough for domestic companies to compete and have monopoly over Canadian market. In addition they are usually productive than domestically controlled companies. Equally important it seems that foreign industry has assisted Canadian economy to become stronger and employ Canadian, however Government studies revealed that foreign enterprises had generally employed Canadian capital to expand their resource and manufacturing concerns rather than bringing new capital into the country to fund growth[2]...
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...A Project Report on Importing Wheat from India to Canada Global Entrepreneurship Submitted to : David Colaluca Submitted By | : Arshvir Gill (100805346) | | Jasmeet Grewal (100815274) | Date : 16 March 2012 George Brown College Reason for selecting Wheat Wheat is the staple food of millions of people. Its cultivation started during Neolithic probably as early as 6,000 to 7,000 year ago. Wheat is the dominant food grain of world commerce with 682 million tons productions, 638 million tons consumption, and 136 million tons trade with 197 million tons ending stocks. Wheat is the most common food product and it is widely used by each group of society. So, we plan to import wheat from India because India stands at number 2nd after China in wheat production. It contributes 81 million tons. India's production rate expected to raise high during current years. The wheat harvesting area in India is the world's largest. It is cultivated from a sea level up to even 10,000 feet. More than 95 percent of the wheat area in India is situated north of a line drawn. India, the second-biggest grower of wheat, allowed private companies to export the grain for the first time in four years, Food Minister K.V. Thomas said. A panel of ministers permitted overseas sales of 2 million metric tons of wheat. Varieties of wheat in India Dara Kalyan Mexican 147‐Avg. Desi (Durum) Economic, financial and marketing reasons for the choice of wheat ...
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...Why the loonie’s fortunes are still tied to oil By Jeff Rubin January 18, 2013 – The Globe and Mail It’s a few weeks into a brand new year and so far Canadians are discomfited by watching our dollar rank among the world’s worstperforming currencies. The oft-cited reasons include high consumer debt levels, the potential for a housing bubble, and worries that Canada’s economy is on a divergent path from the U.S. Really, though, it’s about oil. For years now, Canada’s currency has traded as a petrodollar. That might not jive with its standing in the domestic economy, where it accounts for around 4 per cent of GDP and roughly 2 per cent of employment. When it comes to investment and trade flows, though, it dominates. Given that the loonie’s fortunes will continue to be tied to oil for years to come, what might that future hold? Canada certainly has the potential to become an even bigger player in the global oil market than it is now. The oil sands are the third-largest oil reserves in the world. The Harper government, meanwhile, has made no secret that it will do everything it can to ensure environmental and other concerns won’t stand in the way of the oil industry’s plans to more than double bitumen output from northern Alberta to five million barrels a day over the next two decades. But is that best-case scenario for the oil industry realistic? Prime Minister Harper may think so. He clearly still has visions of Canada becoming an energy superpower. Financial markets have more doubts...
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...The Wilson Brothers Limited Case History In 1960, the Wilson Brothers, Bob and John, started Wilson Brothers Limited. This Canadian company manufactured and distributed various lines of prepared food products for the Canadian market from a number of plants, with the head office located in Brandon, Manitoba. Bob was just 23 years old at the time, and John was 21. In the first year of operations, the sales volume for Wilson Brothers Limited was $300,000. By 2000, Wilson Brothers Limited had six operating plants in Canada. They had also expanded to the western US market and had several plantsin Europe. Wilson Export Division was responsible for exporting product to Japan and China. In 2000, the total sales volume of the Company was over $6 billion. The company was a Canadian business success story, both at home and abroad. In addition to the spectacular volume increases, the company was very well managed financially. Ithad no reason to go public to raise capital as it financed all of its expansion through earnings. There were several reasons for the Company’s exponential growth. First and foremost, the brothers valued hard work. They each worked ten to twelve hours per day, even in the latter stages of their careers. Consequently, their senior and middle management group worked similar hours. Secondly, each brother was a skilled salesman in the traditional sense. Their handshake was their bond. Thirdly, they had tremendous “cultural sensitivity.” Whenever they expanded to...
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...Every company has its strength, weaknesses, opportunities, and threats. Also, Bank of Montreal has those types, so according to the SWOT analysis of our bank I will talk about these. First of all, I will talk about strengths. As we know, BOM is in Canada and for a successful company in Canada needs self motivation in which Self-roused individuals have a tendency to have the stamina to endure start-up difficulties, and the take after through to achieve long haul objectives. Also, the basic start-up component, business and industry information is normally increased through experience. Experience gives your vision a strong establishment. Experience empowers you to survey circumstances and make great, grounded choices. With this we understand that business and industry knowledge is very important. Moreover, a successful company should have organizational and management capabilities because in the case of succeeding in little business, you will need to compose and deal with your time, the points of interest of your business and the individuals who work for you. Designation is a powerful association and administration apparatus. Vision is another important thing that a company should have. We know that because all organizations are based on the thoughts or dreams of people; On the other hand, to have a dream is insufficient: to transform your vision into a win. SWOT analysis * Strengths * Over 35,000 employees serves 7 million+ customers * BMO Capital Markets named as...
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...depreciation is 4.05 percent Q2.Assume that the U.S. inflation rate becomes high relative to Canadian inflation. Other things being equal, how should this affect the (a) U.S. demand for Canadian dollars, (b) supply of Canadian dollars for sale, and (c) equilibrium value of the Canadian dollar? ANSWER: If U.S inflation rate becomes high relative to Canadian dollars then the demand for Canadian dollars should increase, supply of Canadian dollars for sale should decrease, and the Canadian dollar’s value should increase. Q3. Assume U.S. interest rates fall relative to British interest rates. Other things being equal, how should this affect the (a) U.S. demand for British pounds, (b) supply of pounds for sale, and (c) equilibrium value of the pound? ANSWER: If U.S interest rates fall relative to British interest rate then the demand for pounds should increase, supply of pounds for sale should decrease, and the pound’s value should increase. Q4. Assume that the U.S. income level rises at a much higher rate than does the Canadian income level. Other things being equal, how should this affect the (a) U.S. demand for Canadian dollars, (b) supply of Canadian dollars for sale, and (c) equilibrium value of the Canadian dollar? ANSWER: Assuming no effect on U.S. interest rates and if U.S income level rises at a much higher rate, then demand for dollars should increase, supply of dollars for sale may not be affected, and the dollar’s value should increase. Q5. Assume that...
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...=========================================== When reporting a crime to local police, you should insist on receiving the Comprobante de Denuncia as confirmation that a report has been made. Police officers may speak only Spanish. Passports and Visas A valid Canadian passport is required for Canadians intending to visit Cuba. The passport must be valid for at least one month beyond the date of your expected departure from Cuba. Canadians must also carry a tourist card (or visa), or a business or student visa. The tourist card is generally provided by tour operators or airlines, or can be obtained from a Cuban government office in Canada in the case of privately organized flights. It can also be purchased at certain airports in Canada. Health Insurance Since May 1, 2010, travellers must present proof of health insurance in order to enter the country. Upon arrival, travellers may be required to present an insurance policy, insurance certificate, or medical assistance card valid for the period of their stay in Cuba. Those who do not have proof of insurance coverage may be required to obtain health insurance from a Cuban insurance company when they arrive. Temporary residents also have to hold valid health insurance policies. Although proof of Canadian provincial health insurance is sufficient for visitors to enter Cuba, your provincial plan may cover only part of the costs and will not pay the...
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...reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2008, Ivey Management Services Version: (A) 2008-06-05 THE COMPANY tC On Friday November 2, 2007, Mikayla Cain, chief financial officer of Pixonix Inc., sat in her office and pondered the impact of the strong Canadian dollar on her firm’s projected financial results. The Report on Business today stated that the Canadian dollar had hit another record, jumping to US$1.0717 from the previous day’s close of $1.0512 after a stronger-than-expected jobs report reduced the odds of an interestrate cut. The Canadian dollar had already been the world’s best-performing major currency this year, increasing 25 per cent against the U.S. dollar and almost seven per cent in the past month alone. Cain knew she would have to understand the impact of the strong dollar on her firm’s cash flows and the tools available to manage the company’s currency risk. No Pixonix was a graphic design company that operated in...
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...User Input |Currency type | |Currency Amount | |Currency Amount | |Exchange Rate | |Exchange Rate | |Currency Type |Choose correct type |Currency Type | |Enter Currency Amount |Calculate total to the |Dollar Amount | | |nearest Dollar amount | | |Foreign Currency Amount |Convert to U.S. Dollars |U.S. Currency Amount | |Currency Type |Display Results | | |Currency Amount |...
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...offered to the two companies and a 0.5% per annum differential between the floating rates offered to the two companies. The total gain to all parties from the swap is therefore [pic]% per annum. Because the bank gets 0.1% per annum of this gain, the swap should make each of A and B 0.4% per annum better off. This means that it should lead to A borrowing at LIBOR [pic]% and to B borrowing at 6.0%. The appropriate arrangement is therefore as shown in Figure S7.1. [pic] | | |Figure S7.1 Swap for Problem 7.1 | Problem 7.2. Company X wishes to borrow U.S. dollars at a fixed rate of interest. Company Y wishes to borrow...
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...Running head: CURRENCY EXCHANGE RATE CURRENCY EXCHANGE RATE Catherine Girard MAN551 Dr. Giscombe March 26 2016 The international trade is closely linked and dependent on the exchange rate, when a company or a trader operates internationally, it is confronted with the notion of the exchange rate, which is very critical to its operations. Like the market interest rates, the foreign exchange market, is a market that is not immune to risk. Indeed, companies as they operate internationally, they are exposed to the exchange rate, which is the main determinant of international trade. Moreover, the exchange rate highlights a real market, one currency, which is also facing a long-term volatility of currency rates, which is due to the parity of purchasing power and status relationships economic (economic, financial, and monetary), between one country and another foreign country. In other words, the trade and current account deficits that assess the purchasing power parity between the states are partly responsible for the instability rates and secondly, the establishment of a floating currencies since the 1970s, and induced inflation. In the short term, financial factors such as economic policies, and actions of monetary authorities. However, this rate instability is affecting all market players, traders, tourists, businesses and institutions. At company level, these fluctuations are two types of risk: transaction risk, and the risk of loss of competitiveness...
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... crude oil is purchased in USD. All export revenues are in foreign currency and local prices are based on import parity prices as well. Maruti Udyog Forward Contracts 6411 (INR-JPY) 70 ($-INR) Import/Royalty payable in Yen and Exports Receivables in dollars. Currency swaps 124.70(USD -INR) Interest rate and forex risk. Mahindra and Mahindra Forward Contracts 350 (INR-JPY) 2(INR-EUR) 27.3($-INR) Trade payables in Yen and Euro and export receivables in dollars. Currency Swaps 5390 (JPY-INR) Interest rate and foreign exchange risk. Arvind Mills Forward Contracts 152.98 ($-INR) 2.25 (GBP-INR) 5 (INR-$) 703.67 21.88 Option Contracts 1 2 2.5 ($-INR) 547.16 Most of the revenue is either in dollars or linked to dollars due to export. Infosys Forward Contracts 119 ($-INR) 529 Options Contracts Range barrier options 4 ($-INR) 8 (INR-$) 2 ($-INR) 3 (Eur-INR) 18 36 971 Revenues denominated in these currencies. Tata Consultancy Services Forward Contracts 15 (Eur-INR) 21 (GBP-INR) 265.75 Option Contracts 8 3 0 ($-INR) 47.5 (Eur-INR) 76.5 (GBP-INR) 4057 Revenues largely denominated in foreign currency, predominantly US$, GBP, and Euro. Other currencie include Australian $, Canadian $, South African Rand, and Swiss Franc Ranbaxy...
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...fluctuations in the exchange rate between these two currencies are where a trader looks to make profit on the Exchange Market. If trader believes that the foreign currency will appreciate against the USD, the trader’s profits will rise with every increase in the exchange price. However if the foreign currency were to fall against the dollar, than the trader would take a loss. Seems simple enough, however traders have option to buy or sell that foreign currency at any time and can go both ways of the currency. So even if the foreign currency were to depreciate against the USD, the trader can still make a profit if they were to sell the dollar on the exchange market. To bring some clarity lets take a look at the Yen. If the Yen were appreciate (rises) against the dollar. A trader would than buy the Yen. By buying the Yen the buyer is also selling the dollar on expectation that the exchange price of the Yen will rise in value. The trader will than decide to close the position, selling the Yen with the exchange price higher than when they first bought it leaving them an increase in value or profit. Now if the Yen were to depreciate against the dollar, the YEN/USD exchange price will fall. That would than leave the trader with a loss as the exchange price falls below their purchase level and leave them a loss. In any trading market, the traders have the option of buying or selling currency pairs ultimately so they can make a profit either way they choose. As in the above example...
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