Forex

Foreign Exchange Rate

2010-05-11T03:01:00.000-07:00

When a firm enters into a forward exchange contract, it is taking out insurance against the possibility that future exchange rate movements will make a transaction unprofitable by the time that transaction has been executed. Although many firms routinely enter forward exchange contracts to hedge their foreign exchange risk, there are some spectacular examples what happens when firms don't take out this insurance. Foreign exchange market is to provide insurance against foreign exchange risk, which is the possibility that unpredicted changes in future rates will have adverse consequences for the firm. When a firm insures itself against foreign exchange risk, we say that is it engaging in hedging.

When two parties agree to exchange currency and execute the deal immediately, the transaction is refereed to as a spot exchange. Exchange rates governing such on the spot trades are referred to as spot exchange rates. The spot exchange rate is the rate at which a foreign exchange dealer converts one currency into another currency on a particular day. Spot rates change continually often on a minute by minute basis. Although the magnitude of changes over short period is usually small. The value of a currency is determined by the interaction between the demand and supply of that currency relative to the demand and supply of other currencies. Changes in the spot exchanges rate can be problematic for an international business.

A forward exchange rate occurs when two parties agree to exchange the deal at some specific, date in the future. Exchange rate governing such future transactions are referred to as forward exchange rates. For most major currencies, forward exchange rates are quoted for 30 days, 90 days, and 180 days into the future. In some cases, it is possible to get forward exchange rates for several years into the future. In some cases, we say the dollar is selling at a premium on the 30 days forward market. This reflects the foreign exchange dealer's expectation that the dollar will appreciate against the other currency over the 30 days.

Foreign Exchange Risk

2010-05-03T03:09:00.000-07:00

Central control of exposure is needed to protect resources efficiency and ensure that each subunit adopts the correct mix of tactics and strategies. Many companies has setup in-house foreign centers. Although such centers may not be able to execute all foreign deals - particular in large, complex multinationals where myriad transactions may be pursued simultaneously- they should at least set guidelines for the form subsidiaries to follow. Firms should distinguish between on one hand, transaction and translation exposure and on the other economic exposure. Many companies seem to focus on reducing their transaction and translation exposure and pay scant attention to economic exposure, which may have more profound long term implications.

On average the company run its factories at no more than 80 percent capacity, so most are able to switch rapidly from producing one product to producing another or to add a product. This allows a factory's production to be change in response to foreign exchange movements. The need to forecast future exchange rates cannot be overstated. No model close to perfectly predicting future movements in foreign exchange rates. The best that can be said is that in the short run, forward exchange rates provide the best predictors of exchange rates movements and in the long run, fundamental economic factors particularly relative incentive rates should be watch because they influence exchange rates movements. Some firms attempts to forecast exchange rate movements in house.

Firms need to established good reporting systems so the central finance function can regularly monitor the firms exposure positions. Such reporting systems should enable the firms to identify any exposed accounts, the exposed position by currency of each account, and the time periods covered. On the basis of the information it receives from exchange rate forecasts and its own regular reporting systems, the firm should produce monthly foreign exchange exposure reports. These reports should identify how cash flows and balance sheet elements might be affected by forecast changes in exchange rates. Some of the largest and most sophisticated firms don't take such precautionary steps, exposing themselves very large foreign exchange risks.

Foreign Currency Convertibility

2010-05-03T02:41:00.000-07:00

Free convertibility is not universal. many countries place some restrictions on their resident's ability to convert the domestic currency into a foreign currency. Restriction range from the relatively minor such as restricting the amount of foreign currency they may take with them out of the country on trips to the major such as restricting domestic business ability to take foreign currency out of the country. External convertibility restrictions can limit domestic companies ability to invest abroad, but they present few problems for foreign companies wishing to do business in that country.

Government limit convertibility to preserve their foreign exchange reserves. A country needs an adequate supply of these reserves to service its international debt commitments and to purchase import goods. Government typically impose convertibility restrictions on their currency when they fear that free convertibility will lead to a run on their foreign exchange reserves. this occurs when residents and nonresidents rush to convert their holdings of their domestic currency into a foreign currency.

Under such circumstances, both residents and nonresidents tend to believe that their money is more likely to hold its value if it is converted into a foreign currency and invested abroad. not only will a run on foreign exchange reserves limit the country's ability to service its international debt and pay for imports, but it will also lead to a precipitous depreciation in the exchange rate as residents and residents unload their holdings of domestic currency on the foreign exchange markets. Governments fear that the rise in import prices resulting from currency depreciation will lead to further increase in inflation. This fear provides another rationale for limiting convertibility.

Foreign Exchange Market

2010-05-03T01:33:00.000-07:00

A company's need to predict foreign currency future exchange rate variations raises the issues of whether it is worthwhile for the company to invest in exchange rate forecasting services to aid decision making. The efficient market argues that forward exchange rates do not best possible job of forecasting future spot exchange rates and therefore investing forecasting services would be a waste of money. The other thought, the efficient market argues that companies can improve the foreign exchange market's estimate of future exchange rates by investing in forecasting services. In other words, such though does not believe the forward exchange rates.

Forward exchange rates represent market participants' collective predictions of likely spot exchange rates at specified futures dates. If forward exchange rates are the best possible predictor of future spot rates, it would make no sense for companies to spend additional money trying to forecast short run exchange rate movements. An efficient market is one in which prices reflect all available public information. Ir forward rates reflect all available information about likely future changes in exchange rates, a company cannot beat the market by investing in forecasting services.

If the foreign exchange market is efficient, forward exchange rates should be unbiased predictors of future spot rates. this does not mean the predictions will be accurate in any specific situation. It means in accuracies will not be consistently above or below future spot rates. Although most of early work seems to confirm the hypothesis. There is some evidence that forward rates are not unbiased predictors of future spot rates and more accurate predictions of future spot rates can be calculated from publicly available information.

Exchange Rate Determination

2010-04-30T03:32:00.000-07:00

At the most basic level, exchange rate are determined by the demand and supply of one currency relatives to the demand supply of another. If the demand for dollars outstrips the supply of them and if the supply of Japanese Yen for example is greater than the demand for them, the dollar/yen exchange rate will change. The dollar will appreciate against the yen. However, while differences in relative demand and supply explain the determination of exchange rates, they do so only in a superficial sense. This simple explanation does not tell us what factors underlie the demand for an supply of a currency. nor does it tell us when then demand for dollars will exceed the supply or when the supply of Japanese yen will exceed demand for them. neither does it tell us under what conditions a currency is in demand or under what conditions it is not demanded.

If we understand how exchange rates are determined, we may be able to forecast exchange rate movements. Because feature exchange rate movements influence export opportunities, the profitability of international trade and investment deals and the price competitiveness of foreign imports, This is valuable information for an international business. Unfortunately, there is no simple explanation. The forces that determine exchange rates are complex and no theoretical consensus exists, even academic economists who study the phenomenon everyday. Nonetheless most economic theories of exchange rate movements seem to agree that three factors have an important impact on future exchange rate movement in a country's currency; the country's price inflation, its interest rate, market psychology.

Nature of the Foreign Exchange Market

2010-04-30T02:49:00.000-07:00

The foreign exchange market is not located in one place. It is a global network of banks, brokers and foreign exchange dealers connected by electronic communication systems. When companies with to convert currencies, they typically go through own banks rather than entering the market directly. The foreign exchange market has been growing at a rapid pace, reflecting a general growth in the volume of the cross-border trade and investment. Two features of the foreign exchange markets are of particular note. The first is that the the market never sleeps. The second features of the market is the integration of various trading centers. High speed computer linkage between trading centers around globe have effectively created a single market. The integration of financial centers implies there can be no significant difference in exchange rate quoted in the trading centers.

Another feature of the foreign exchange market is the important role played by the U. S. dollar, Although a foreign exchange transaction can involve in any two currencies, most transaction involvesdollar on one side. This is true even when a dealer wants to sell a non-dollar currency and buy another. After the dollar, the most important vehicle currencies are the Euro, the Japanese Yen and the British Pound - reflecting the importance of these trading entitles in the world economy. The Euro has replaced the Germany Mark as the world's second most important vehicale currency. The British Pound used to be second in importance to the dollar as a vehicle currency, but its importance has diminished in recent years. Despite this, London has retained its leading position in the global foreign exchange market.

Functions of the Foreign Exchange Market

2010-04-27T05:04:00.000-07:00

The foreign exchange market server two main functions. The first is to convert the currency of on country into the currency of another. The second is to provide some insurances against foreign exchange risk, by which we mean the adverse consequences of unpredictable changes in exchanges rates. Each country has a currency in which the prices of goods and services are quoted. In the United States. it is the dollar ($).

Unfortunately, dollars are not recognized as legal tender in Scotland (one of the European countries), the tourist must use British Pounds. Fortunately, the tourist can go to bank and exchange dollars for pounds. Then they can buy the goods whatever they want. When changing one currency into another, the tourist is participating in the foreign exchange market. The exchange rate is the rate at which the market converts one currency into another. The exchange rate allows to compare the relative prices of goods and services in different countries.

Tourists are major and valuable participants in the foreign exchange market, companies engaged in international trade and investment are major ones. International business have four main uses of foreign exchange markets.

First, the payments a company receives for its exports, the income it receives from foreign investments or, the income it receives from licensing agreements with foreign firms may be in foreign currencies. To use funds in its home country, the company must convert them to its home country's currency.

Second, international business use foreign exchange markets when they must pay a foreign company for its products or services is its country's currency.

Third, international business use foreign exchange markets when they have spare cash that they wish to invest for short terms in money markets.

Fourth, currency speculation is another use of foreign exchange markets. currency speculation typically involves the short term movements of funds from one currency to another in the hopes of profiting from shifts in exchange rates.

Cross Cultural Situation

2010-03-28T00:40:00.000-07:00

When business operations and organizations cross international boundaries, the ensuing problems and situations transcend those on which a manager has based his/her past professional experiences. He/she meets by the simple fact of applying management to a foreign group, unusual and intriguing human problems that require from him/her a new and unconventional approach. A European manager in an African company may be asked by his/her local employee for a second company house for his/her second wife/husband, and he/she has to choose between company rules and supporting a local leal custom for the sake of maintaining food personal relations with his/her employees.

Another European manager in working in Tokyo may be faced with the problem of having to choose between discharging a redundant employee facing the opposition and hostility of all his/her personnel or keeping him/her payroll according to the local custom which wants an employee to be committed to his employer for his/her whole working life. A third European manager working in a Latin American company may be surprised to see the better result he/she obtains by close personal relations with his/her subordinates rather than by using an impersonal and detached style of supervision.

These three examples show some of the ways in which a local culture may influence organizational behavior. In the three situations the simple application of the national way of thinking of the foreign manager does not help him/her to solve his/her problems. Reusing the second house to the African employee discaharging the Japanese, using the cold and impersonal style of supervision in Latin America may perhaps be paying off in the short run but it may then create such a tense situation in terms of union relations or government support

Organization and Staffing

2010-03-20T00:46:00.000-07:00

A central feature of modern organizations is inter dependence, where no one has complete autonomy, where most employees are tied to many others by their work, technology, management systems and hierarchy. These linkage presents a special challenge when organizations attempt to change. Unless many individuals line up and move together in the same direction, people will tend to fall over the another. To executives who are over educated in management and under educated in leadership, the idea of getting people moving in the same direction appears to be an organizational problem. What executive need to do, however, is not organize people but align them.

Managers organize to create human systems that can implemented plans as precisely and efficiently as possible. Typically this requires a number of potentially complex decisions. A company must choose a structure of jobs and reporting relationships, staff it with individuals suited to the jobs, provide training for those who need it, communicate plan to the work force, and decide how much authority to delegate and to them. Economic incentives also need to be constructed to accomplish the plan as well as systems to monitor its implementation. These organizational judgments are much like architectural decisions. It's question of fit within a particular context.

Trying to people to get people to comprehend a vision of an alternative future is also a communications challenge of a completely different magnitude from organizing them to fulfill a short-term plan. It's much like the difference between a football quarterback attempting to describe to his team the next two or three plays versus his/her trying to explain to them a totally new approach to the game to be used in the second half of the season.

Whether delivered with many words or a few carefully chosen symbols, such messages are not necessarily accepted just because they are understood. Another big challenge in leadership efforts is credibility-getting people to believe the message. Many things contribute to credibility: the track record of the person delivering the message, the content of message itself, the communicator's reputation for integrity and trustworthiness, and the consistency between words and deeds.

Management and Leadership

2010-03-19T22:37:00.000-07:00

Management is about coping with complexity. Its practices and procedures are largely a response to one of the most significant developments of the twentieth century: the emergence of large organizations. Without good management, complex enterprises tend to become chaotic in ways that threaten their very existence. Good management brings a degree of order and consistency to key dimensions like the quality and profitability of products.

Leadership, by contrast, is about coping with change. Part of the reason it has become important in recent years is that the business world has become more competitive and more volatile. Faster technological change, greater international competition, the deregulation of markets, overcapacity in capital intensive industries, an unstable oil cartel, raiders with junk bonds, and the changeing demographics of the work force are among the many factors that have contributed to this shift. The net result is that doing what was done yesterday, or doing it 5% better, is no longer a formula for success. Major changes are more and more necessary to survive and compete effectively in this new environment. More change always demands more leadership.

Consider a simple military anology: a peacetime army can usually survive with good administration and management up and down the hierarchy, coupled with good leadership concentrated at the very top. A wartime army, however needs, competent leadership at all levels. No one yet has figured, out how to manage people effectively into battle; they must be led.

These different functions - coping with complexity and coping with change- shape the characteristic activities of management and leadership. Each system of action involves deciding what needs to be done, creating networks of people and relationships that can accomplish an agenda, and then trying to ensure those people actually do the job. But each accomplishes these three tasks in different ways.

Business Behaviour

2010-03-14T00:49:00.000-08:00

Small entrepreneurs in the informal sector some times have distinct skills, especially a knack for improvisation. But they are entrepreneurs in the classical sense of the term i.e. looking for productive investment opportunity for their capital. The allocation of their capital is usually limited to a few alternatives. Because pf the often precarious economic situation, a high risk aversion of typical for their business behavior. Their imitativeness and flexibility are of a defensive nature in an economic environment that is characterized by scarcity and insecurity they have no permanently adapt and localize if possible new markets. They can do so because they can simultaneously adapt their production, consumption and reproduction behavior to changing conditions. They are generally equipped with only a few capital goods. They work in the open air and or in the family's dwelling, use simple, hand operated multi purpose tools and do not maintain stocks of raw materials or finished products. Among other factors, the technological competence of these enterprises determines whether or not they can not carve themselves out a place on the market.

Technology innovations must not be expensive and the entrepreneurs must be able to master them. for the competitiveness of the owner of a spinning mill, for example it can be very important to find a way of producing saris with a working area of three meters rather than twelve so that he/she can build a low cost shelter and continue production independently of the weather. Under normal circumstance it is not feasible to provide individual consultancy to help solve the many thousands of individual problems facing micro enterprise. Small business promotion project concentrate more on providing a system of reference for technological information. The entrepreneurs is provided with information on where he/she can attend training soap production, for instant or where he/she can produce better inputs. what is even more important than technological competence for the success of small scale entrepreneurs through their business competence. They must find the unique selling if they are to become successful entrepreneurs. For the entrepreneurs in the informal sector that means finding products that can not be mass produced. These could be embroidered pennants for club or school exercise books with the logo of certain school.

Economic Resource Mobilization

2010-03-11T19:33:00.000-08:00

Economic resource mobilization should be done in a way to bring about a positive spiral of development process which at every turn results in an increase in invest-able surplus. Some amount of capital must be invested in the factors of production necessary to achieve the desired increase and improvements. Through saving for example capital can be built up and this could enhance the capability of the group's enterprise in investment which could lead to increase in production which in turn could result in an increase again in savings and hence the spiral process continues. Another aspect economic resource mobilization is savings mobilization. In this regard members are faced with the choice between putting aside some money or kind in favor of immediate consumption which could lead to capital formation.

Savings mobilization campaigns therefore have to take consideration these motives external factors and the forms of contributions and savings to make resource mobilization successful. In addition the methods of savings mobilization has to be fully compatible with the prevailing socio cultural norms and values, and external models have to be adjusted to local circumstances. Invariably, in more concrete terms, the motives to save in developing countries turn around improving or starting one's business, protecting the family against unforeseen events, payment of school fees, and other dues and taxes and purchasing expensive items which cannot be purchased from the little excess liquidity at hand. Techniques of savings mobilization have to take into account the availability of resources and the time of availability.

In many Asian countries, savings have been successfully mobilized immediately after harvest when farmers have excess liquidity. In addition, there seems to be frequently a disposition of farmers not to make contribution in cash but in kind. many farmers prefer to contribute a bag of rice of maize instead of selling their product themselves and then making a payment in cash from the proceeds. While monetary savings become predominant in fairly developed economics where money has penetrated all or most sectors of the society, in other economies; people still prefer to make savings in kind e.g. in the form of land, cattle, or gold and jewelry.

Local Information Environments

2010-03-11T02:36:00.000-08:00

The idea that bureaucratic government agencies can develop local leadership is an illusion. A more promising strategy for development and strengthening of broadly based local leadership is through the creation of local micro-information environments in which co-operation between villagers and project workers can flourish. For example, such local learning environments could be stimulated by establishing decentralized radio stations and citizen band systems through which farmers could exchange information on local crop prices, weather and market conditions. Through the use of video tapes we might be able to revitalize oral traditions and bring even the illiterate into the information age.

The information environment in its totally- including every medium from wall posters and folk plays to television and computer data banks- must be shaped in such a way that it is accessible to all. Material that is only comprehensible to more high educated residents works to the relative disadvantage of less educated groups and would only serve to widen the income gap. Villagers and exurbanites also need specific information about their right as citizens. Ideally, this should be allied to the knowledge of where and how to obtain legal redress for injustices, but even the basic information about individual and collective rights may encourage people to assert themselves. Above all and this can not be emphasized too strongly, the information channels must include new or improved mechanisms for dialogue and interaction-in short for mutual learning.

To meet the learning needs of development, there obviously must be an unprecedented flow of information into the villages and urban neighborhoods, capable of reaching the poorest as well as the traditional traditional channels of communications such as the village headman, the extension services and the school systems. What is called for is the transformation of the village from a traditional society to an "information community", capable of acting and responding creatively to the information reaching it and capable of generating its own information as well as seeking out new information as needed.

Communication Revolution

2010-03-08T00:10:00.000-08:00

It is worth reminding ourselves that when the post-war development experience began in the early year1950's, the modern communications age was just dawning. The transistor had been invented a short ti,e before, the first Sputnik was not launched, and the first communications satellite was five years beyond that feat. Microchips had not yet been devised and the typical computer was enormously expensive, very large, very heavy and accessible only to a handful of specialists. The new information and communications technologies proliferated at an astonishing speed in developing countries. During the late 1950's and 1960's, according to the UNESCO statistics, radio ownership increased by more than a hundredfold in Latin America, by more than two hundred times in Asia and more and four hundred times in Africa. Television, with its even greater power to stir hopes and expectations followed apace.

While this information revolution is having a profound impact on the rural areas of the South, this is a mere shadow of the impact the new information based technologies are having in the North. There a new industrial revolution is now taking place based on advances in biotechnology. If the countries of the South do not develop the capacity to participate in this revolution, they will become even more vulnerable and dependent on the North than they are now having existing development in information sector. By a human nature we can no longer afford to think in terms of closing a knowledge gap. Rather, we will have to leap over a whole generation of outmoded technologies and theories of organizations, We do not have time to repeat the mistakes of the North or even to follow passively in their footsteps picking up techniques that they have outgrown and discarded. We must cultivate the art of innovation or invent it in a form that is consonant with the real needs of our societies.

The information revolution creates possibilities in Asia for significant social innovation. Access to information is itself a kind power and the empowerment the independent access brings is multiplied when information can be exchanged as well a received. New information and communication technologies, ranging from those as simple as the cassette tape to these as complex as the communications satellite hold out this promise. They can be organized in a way that not only permits people to choose information from a larger and more varied menu but also permits them to participate in programming, in reporting news relevant to themselves and in shaing what they have learned with others.

Income Generating Measures

2010-03-05T04:17:00.000-08:00

Income generating measures are referred to in a whole variety of contexts and are made the subjects of development policy in the Third World Countries. In many developing countries the governments, state donor organizations and non government organizations are increasingly concerned to free themselves from the follow-up commitments associated with rural development measures and put the target groups in a position where they can take on financial responsibility for the infrastructure such as rural road construction, schools, drinking water supplies etc.

The high demands made on income generating measures, coupled with the varied and sometime contradictory motives and justifications have far-reaching consequences both for theoretical discussions and for operational-ism of such measures. There is usually a consensus that income-generating measures are not the same as the measures usually adopted for promoting small scale industries and crafts but are rather to be regarded as applying below this level more to the informal sector of the economy. But it is often unclear whether they are to be planned, implemented and evaluated primarily from commercial-economic humanitarian policy points of view.

Thus more any other development policy instrument income generating measures offer the observer a diffuse picture characterized by arbitrariness and professional dilettantism. The impression gained from evaluations of income generating measures in reality if one accepts the purely economic objectives which usually lie behind such evaluations is with almost to exception negative. For several years to now statements of intent from development policy makers, planning documents for development projects and reports from state and non-governmental development organizations have made increasing use of term income generating measures.

Networking and Business

2010-03-04T02:57:00.000-08:00

The term "network" is not new. We are living since decades with telecommunication networks, radio-and television networks traffic networks, computer networks and nowadays business networks has also been introduced. In various medias such as newspapers, journals, radio, TV etc. have been confronted with an inflation of the conception of "network". Moreover, since some years now networking seems to be the "in thing"in development work across the globe. Basically, networking development could be described for the means as follows :

- as an important instrument for technical and other cooperation;
- as a tool for resource mobilization and information dissemination;
- as a structure of activities;
- as a channel for sharing experience and knowledge
- as a new forum for the expression of democratic principles;
- as an impulse for social movements and also could be described as a new fashion for
'jet-setting"

Networking should be understood that each member or subscriber or user has equal tasks. It is either the link in the network or the joint. A network therefore is constructed or put together for a specific purpose as follows :
- it collects;
- it catches;
- it carries;
- it spans over a distance
- it covers something.

In order to be able to do this, the distance between the joints of a network has to be carefully calculated so that the links are not overstretched. The links themselves have to be of a strong material which also allows a smooth flow of forces in all directions. The joints have to be equal strength and the links of equal length. Any network, be it for the exchange of information and experiences, advice, suggestions, for resource mobilization, for research coordination, for lobbying etc. should be based on the same principle. This is the point where most of the problems encountered with networking start because, in terms of networking means "giving" and "taking" on equal terms. Only taking will inevitably result in a gradual weakening of the network and thereby add another "dead" network structure to those already existing.

Information and Communication

2010-01-20T17:44:00.000-08:00

Information and Communication is a crucial infrastructure for development of any country. It plays a vital role in overall development of the country. The task of bringing positive changes on day-to-day lives of citizen by providing continuity to development activities in a sustainable manner depend on the effectiveness of communication in the world. It is indisputable that the development expansion and effective mobilization of information and communication can play an important role in bringing together every citizen in the process of nation building by raising their awareness. Consistent with the free, liberal and competitive economic policy adopted by the country, it has become important to promote commercialization in the development and mobilization of communication sector to secure economic achievements. In doing so, the sector become self-reliant and can contribute to minimize the economic burden of the nation. At the same time, the development of communication sector can help in reducing poverty, in the country as its development can lead to the development of the social sector. This ultimately contributes to the overall of the country. In the present context in the world of private sector being attracted to invest in the communication sector. It is equally important to welcome such efforts and move ahead to create a new age communication system in a healthy and competitive manner.

The activities of information and communication sector play an important role in enhancing socio-economic capacity of the nation by making individual, community and country informed and activating their activities. Timely and enough information can contribute to achieve high economic growth by lowering the cost of production and diversifying market. As a result, of growing possibilities of use of new technology available in the information and communication sector. Similarly, there is a high possibility that the information and communication can achieve a notable development jump by creating awareness in the societies. There is also high possibility of gross domestic productive of service sector can be increased remarkable due to the development in various sectors such as telephone services, radio, television, paper and magazines, postal services and international information transferring service etc. Similarly, since the development of information and communication in the world also contributing for the expand of distant education and social unification. It is playing an important role in social development of the country. The development of information and communication also contributing to implement the transparency and good governance, as such development forms quick and effective contacts between the rural levels and central levels as well.

Forex and Investment

2010-01-19T00:23:00.000-08:00

In order to facilitate the imports of industrial raw materials, capital goods and transfer of advanced technologies, the stability of exchange rate is a prerequisite. In view of the growing dependency on foreign resources for economic development there has been a paradigm shift in the concept of foreign assistance world-wide. As such "Trade not Aid" has got prominence. The process of liberalization which commenced during 80' has gained dynamic during the late 20th century, resulting in global economy to be more liberal and integrated. On the whole, the international trade has become instrumental in activity expansion, growth and maintenance of stability. To attract foreign investment through reforms in foreign exchange and balance of payments in the country and limiting the current account deficit needs to keep in a desirable level and in order to facilitate the imports of capital goods and support the transfer of improved technologies needs to bring dynamism in the economy of the country at the same time. Similarly, the stability of exchange rate is also need to maintain to create conductive climate for investment in the country.

There is no argument that the foreign investment is necessary in view of the limited financial and other resources available especially within the developing countries. It is equally so to speed up industrialization in the country. Foreign investment is essential because foreign capital, advanced and modern technology, expertise, and administrative skills can assist in the development of industrial infrastructure and explore foreign markets for local product of the country. To attract and become a destination for foreign investment the respective individual country needs to design and competitive programs in friendly economical environment. To attract the investors including from foreign or external countries there is also essential to bring about stability in exchange rate through sustainable balance of payments. For this, following steps could be adopted :
- by reducing the trade deficit and current account through diversification of exports,
commodity-wise and country-wise;
- by maintaining the foreign exchange reserve to an optimum level by obtaining a sustainable
surplus in balance and payments through inflow the private foreign capital; and
- by making local currency gradually convertible also into capital account transaction.

For making encourage especially to external investors the foreign capital and technology flow is an important means to supply the increasing demands of capital in the country. For this, following strategies should be adopted under economic development policy of the country:
- give emphasis on foreign investment and technology transfer in the country;
- promote foreign investment in the country;
- develop industries;
- build favorable legal infrastructure for the foreign investors; and
- provide security guaranty to both investors and industries .

Employment and Economic Development in Developing Countries

2010-01-17T01:33:00.000-08:00

Employment is the foremost means of transforming economic development into an opportunity to alleviate poverty in developing countries. Providing employment to poverty stricken masses can reduce poverty to make economic development efforts more sustainable. It also strengthens social and political stability together. It can be said that the employment is the outcome of investment development efforts. Without creating job opportunity and providing employment covering all kinds of groups i.e. low castes or occupational castes, poor, rural, low income etc. people in any country can not follow to reach to the entire destination of economic development of the country. Although, investment and level of economic transaction influence economic activities in subsistence level, they influence the opportunities for employment . Without economic growth efforts mere employment oriented programs cannot provide opportunity to the whole labor force.

It is therefore, employment should be conceived as an important link in the process of economic development thereby considering that how more employment opportunities can be generated in the development process in the development countries. In this connection, giving emphasis with a view to extend the access the employment opportunities need to create of the poor community as well. Poverty is particularly rampant in the rural areas in the development countries. Poor communities generally exit among peasants with marginal land holdings, occupational castes or low castes, tribes and matriarchal households. Keeping in mind this, targeted efforts are also required to provide basic needs as well as minimum social services and assurance of security to the backward rural and destitute groups through the creation and expansion of opportunities for income generation and employment.

So, it is necessary to create the employment opportunities by investing and targeting to aforementioned groups and people. It is also need to well manage and make necessary arrangements to increase productivity in the respective developing countries. If not done such arrangement for outcome of as an achievements of investment in the country, capital will replace available labor in the country. Similarly, the rights and interest of labor also need to protect and remuneration is also need to provide them. It helps to keep the relation in between labor and management in goof atmosphere. If the relation among those management and labor is not good situation, can displace labor and adversely affect investment, leading to decrease in employment opportunities. Keeping this in mind, in order to prevent such possibility, institutional development is essential to protect labor's right and interest as well as to create harmonious relationship in between management and labor. It helps to increase productivity of investment.

Government Expenditure

2010-01-13T21:36:00.000-08:00

Government expenditure in any country acts as energy to the country. Government expenditure makes major contribution to the balanced regional or state level distribution of national income. But uncontrolled government expenditure brings unwanted inflation, which may ultimately produce various income distortions. Therefore, it is necessary that objectives of government expenditure should be directed towards achieving the targets set in the development plan and to establish macro-economic stability. Government expenditure helps to increase economic growth rate by encouraging private entrepreneurship and investment. The important aspects of government expenditure are to support to intensive economic activities of the private sector rather than to achieve immediate direct benefit. In other words, while examining the utility of the government expenditure, it is necessary to see whether such expenditure help to expand total economic activities of the country.

The next important aspect of government expenditure management is to increase the productivity of the expenditure. Government's continuous efforts is necessary to achieve more benefit with minimum expenditure, changing the pattern of expenditure. The important aspect of government expenditure control are its usefulness and productive rather than the limit of revenue mobilization. Generally expenditure tends to increase as time passes, it firm and solid measures to control will not take forth. To control the increasing trend of expenditure it is necessary to adopt various measures and examine each and every item of expenditure on the basis of its utility and productivity from time to time.

Most of government expenditure in developing countries may appear unreasonable if overall economic situations improves and involvement trend of voluntary exchange of goods and services increases. The government expenditure is important with a view to creating effective demand for education and community development especially in the least developed and developing countries as well. Government may gradually minimize expenditure in those areas through the creation of effective demand or growth of willingness and ability of involvement in voluntary exchange. The share of total expenditure particularly in economic sector and services and increasing in investment in these sectors could be considered proper in view of supporting the private sector. Because of playing vital role participation and investment of private sector in any country is very important in order to improve economic condition of the country .

Privatization of Enterprises

2010-01-13T02:26:00.000-08:00

In order to reduce burden of government for government owned corporation and enterprises policy of privatization of the enterprises is introduced in any country. The government has to follow the required procedure to privatize the government owned corporation or enterprises. It is believed that the privatized enterprises or industries are run more smoothly with well and competitive management rather than run by the government itself. Private organization and enterprises are run with concentrating the views on service oriented as well as profit making oriented base. But the government owned industries and enterprises are run in different ways that is differ with the privatized one. However, sub rules and regulation to run the privatized enterprises has to approve by the government. There will be also a prescribed provision to make a follow up the privatized enterprises by the government body. Such provision is made to follow the policies introduced by the government.

In context of privatization of enterprises, studies must be undertaken and financial statements updated prior to privatization of an enterprise of the country. Likewise, the assessment of assets and the business can be undertaken under the service of difference professionals and experts. This task is not only difficult, but also completed and expensive as well. Moreover in the process, many employees of the overstaffed corporations have to be inspired for retirement even it needs an attractive package of compensation. This requires a huge amount of money. That is why, so far, the initiative to privatize big enterprises with large number of employees will lag behind. In this context, to put the program ahead, it is necessary to come up with a concrete personnel policy and compensation schemes on the one hand, and to obtain additional resources needed to run the programs on the other.

The price of a corporation to be privatized should be determined in the competitive market environment. The investors may not be inclined to forward to invest in those corporations because of the burden of unproductive assets and heavy debt. Though it is possible to estimate about the value to be received from the sale of the enterprise through the evaluation of the assets and business of the corporation from the experts concerned, it is not easy to determine the actual price at which the corporation can be handed over. This problem could be solved by adopting a policy of pricing that would accept the business value determined by the competitive market as the appropriate price, instead of relying on the decision makers' arbitrary pricing. Because privatization is not a short or medium-term economic strategy, rather it is a long term process.

Forex and Price Policy

2010-01-12T17:55:00.000-08:00

In the developing countries, the first blow of price falls on the fixed income and vulnerable group of society, which in turn , increase the intensity of poverty. Regarding this, price policy, should formulate in the line with the objective of avoiding the adverse effect of price rise on the leaving standard of all people of the country while maintaining an equilibrium between the demand for and the supply of goods and services; protecting the interest of producers, investors and consumers; and attaining economic stability by keeping the price level at the desired limit. In any country the external factors also effect on the price policy of the country such as the effect of international price rise and in particular the direct or indirect impact of price increase in mostly neighboring countries. Besides, internal factors of the country such as money supply, government budget deficit and supply situation tend to exert a pressure on price. Therefore price policy need to adopt without having a pressure on price due to such internal factors.

It is appropriate to aim at keeping inflation at a desired limit, particularly through the implementation government fiscal balance and tight price policy. On the one hand, price policy should be able to contribute to the efficient allocation of factors of production and on the other, it should be directed towards protecting the interest of consumers. Factors of production, such as labor, capital, and entrepreneurship, could made active through the use of price policy in order to attain efficiency in production exchange and distribution. While talking about commodity price, allow to determine in accordance with the market principle. If the price of a particular commodity influences by the production and supply situation of that commodity in relation to its demand, first price policy need to direct towards increasing the production of the such essential and consumable commodities.

In the attempt to increase the supply of essential commodities by increasing the production of productivity of agricultural inputs, pocket farming practice need to promote only after considering the geographical reality region wise. The timely projection demand for inadequate or short supply essential commodities has to conduct and their import encourage from the countries exporting quality goods at low price. In order to ensure a smooth supply of essential commodities a distribution system of such commodities at fair price through existing corporations and cooperatives would be better to commence. For this, is most essential study the real cost and selling price of essential commodities produce in and imported goods and items to country in order to ensure their real price.

Forex and Monetary Policy

2010-01-12T07:11:00.000-08:00

In order to make economic growth rate sustainable, internal and external stability of the economy requires internal stability in the country at first. Internal stability could be attained by allowing to creating a favorable situation in any country in price and interest rate whereas external stability could be achieved by keeping foreign exchange rate at a desired level. To meet these ends, monetary policy has to play a conspicuous role. Particularly, the monetary sector can contribute to attain macroeconomic stability by not allowing to creating excessive demand while maintaining the expansion of money supply consistent with the situation in any country that the resources mobilized by the monetary sector have to play a sustainable role in economic growth rate and poverty alleviation if any as well.

While talking about the improvement in the interest rate structure, two aspects come to appear: (a) to reduce the level of prevailing interest rate gradually to international level and (b) to reduce spread between the interest rate on deposits and credit. In order to attain the first purpose, the rate of inflation has to be reducing and the exchange rate has to be kept stable. Price and exchange stability could be attained only through macroeconomic stability. In this regard, monetary policy has to play a supportive role. Although commercial banks can mainly undertake measures such as organizational reforms of banks, maximum utilization of resources and increase in non-cash reserve transactions to reduce the spread between interest rates on deposit and credit. Regarding this central bank of any country can contribute to this end through reducing the compulsory cash reserve ratio. Such a spread remains high as a result of keeping idle a large chunk of resources of commercial banks in the form of compulsory cash reserve ratio.

When the balance of payments situation of any country appears to be favorable, it is essential that the reserve ratio has to be reduced to a low level with an aim to increasing returns on the resources of commercial banks. While considering the argument that private sector can be more efficient for economic activity than government sector, it could be concluded that resource of the financial sector could be channelized more to the inefficient sector than in the efficient sector. In addition to the government, public enterprises also could be utilized a large amount of bank credit and resource flow to the private sector. As a result, it could be shrunken the possibility of the private sector for utilizing credit from the banking sector.

Forex and Liberal Economic Policy

2010-01-11T00:26:00.000-08:00

In the context of liberal economic policy pursued by any country is essential that fiscal and monetary policy should be liberal and sound to create a competitive environment. On one hand, economic stability has to be attained along with high economic growth rate on the other . And attention has to be paid on income distribution. To fulfill the dual objectives, balanced measures have to be undertaken through the fiscal and monetary policy. To correct economic instability caused by the balance of payment deficit, decline in foreign exchange reserves high inflation and growing government deficit finance, the structural adjustment program would be effective. Monetary as one of the economic policy of the country should be applied in means of attaining economic stability in any country. As a result the country will have only a very little chance to face the balance of payments deficit.

Although, the foreign exchange reserves the country at the level of importing capacity, if there is no denying the fact that it will decline to minimum level. Similarly, if the balance of payments surplus can not be maintained. Moreover, to reduce unequal distribution of income; assist in promote the mobilization of savings through positive interest rate policy; keep interest rate borrowing at a minimum level; promote exports by maintaining real foreign exchange rate at a competitive level and create an environment of confidence for foreign investment, it is highly essential to keep inflation under control. There are several reasons for inflation. However, the significant factor is excessive money supply. Therefore, it is necessary that, keeping money supply within a desirable limit in order for inflation not to be caused by monetary factors. Such monetary policy needs to adopt for a significant instrument for price stability.

In the context of liberal and open economic policy pursued by the different countries, the fact that foreign trade evolves as a backbone to economic development is indisputable. Since exports have to play a lead role in this regard, it is absolutely necessary to maintain export competitiveness by keeping the real exchange rate at a certain level. To maintain the real exchange rate at a desired level, price level and prevailing foreign exchange not to be overvalued. As mentioned above monetary as an economic policy of the country has to perform functions like open market intervention and price control in the country. So, the objective of monetary policy has to be concieved of keeping exchange rate, at a certain level of maintaining healthy balance of payments position rather than controlling money supply.

Forex and Risk Transfer Mechanism through Future Markets and Share Markets

2010-01-09T22:15:00.000-08:00

From the economic point of view, the function for futures markets is to allow for the transfer of risk. Critics of futures markets argue that they are nothing more than legalized gambling dens for businessmen. The line between gambling and investment is not always a clear one, but a line certainly can be drawn. Gambling refers to a situation which is contrived precisely so that someone may wager for personal gain. Investment, on the other hand, is generally regarded as the commitment of money to an enterprise or activity which has intrinsic economic value and offers a reasonably high probability of growth. It is true that a speculator can in fact buy the company's shares in the secondary market and speculate on whether they go up or down, but this is not the reason that the shares existed in the place.

Mechanism for the transfer of risks is generally accepted as essential for the smooth functioning of modern society. Share markets are also a mechanism for transferring risk. An efficient secondary market allows investors to liquidate their holdings in shares if they are no longer prepared to bear the risks of share ownership. Without the share market, the investor in an enterprise would be in much the same position as a partner in a small firm or shareholder in a proprietary limited company.

Future markets serve a vital function within the area of risk transfer. They have the special function with in the area of risk transfer. They have the special function of allowing those who do not wish to take risks to nevertheless run business enterprises. The future markets enable many productive entrepreneurs and businessman to operate without exposing themselves to risks greater than they are willing to bear. The futures markets are also valuable to the economy in that they facilities price discovery and the rapid dissemination of prices. In a traditional forward market, contracts are not standardized and are entered into directly between buyers and sellers.

The price at which forward contracts are fixed are not relayed to the market is therefore not as efficient as it could be, and buyers and sellers cannot be sure that they are getting the best possible price. In the futures markets, by contrast, the competitive nature of the traders ensures that commodities trade ensures that commodities trade at or very close to what the market thinks they are worth, and the smallest market user ha as much knowledge as the largest user as to the current value attached to the commodity.

Forex and Liberalization

2010-01-05T08:49:00.000-08:00

Since the late 1980s and particularly the early 1990s, the concept of economic liberalization and privatization gained a rapid momentum worldwide and it more or less made an impact on both the plan and market economy. Realizing the need to integrate gradually into the wave of globalization while adjusting and transforming national economy policies in line with the changed context of global economic system economic policies were adopted by the countries. With this there were change accordingly with a view to taking a maximum benefit from liberalized global market in an attempt to gradually make the economy liberal, integrated and competitive with the external sector, open import, current account. It helps to build necessary infrastructures for capital account convertibility in future. Accordingly, the market based foreign exchange rate system are some of the far reaching steps for developing global market economy. It has become strongly likely that the entire economy can ultimately benefit from the comparative advantage as limited resources are highly utilized and channelized towards the sector with a high return.

Over the last few years, the concept of foreign aid has undergone a change in the world. In recent days, the concept of trade not aid is becoming stronger. This will bring about a transformation in the structure of foreign capital. This strongly activates the need for extending further an access to broad international market for goods and services by attaining comparative advantage through the maximum utilization of internal resources caused by the use of foreign capital and technology. Considering the fact that external sector instability and fluctuations can have multifarious contagion effects on made in to strengthen the external sector by attaining the balance of payments surplus, to protect realized achievements and to reap the maximum benefit from the liberalization of external sector. Although the open and liberal system in the foreign exchange sector has established a root infrastructure in the economic system of the country. In this regard, the process of exchange rate determination shifted from the controlled system to a system based on market forces (demand and supply).

Foreign currencies requires for business activities of the private sector as well as for the amortization of external debt by the respective government. Once the system selling price of the convertible foreign currencies based on open market implementation, remarkable reform measures could be found out as a favorable situation for trade in the country In addition to foreign currency requires for commercial sector (import), remarkable reforms on the arrangement of foreign currency requires in the service sector for various purposes . This could be obtained directly from commercial banks established in the country. This could be able to spend for respective depositors of commercial banks in the country for various purposes from the account opened in foreign currencies. As a result, this arrangement helps to the agencies in earning foreign currencies and would be able to increase revenue asset in the country and contribute to develop economic status of the country.

Forex and Capital Market

2010-01-05T00:25:00.000-08:00

Development and expansion of capital market are essential for the rapid economic growth of the country. Capital market helps economic development by mobilizing long-term capital needed for productive sector. The main objectives of the capital market is to create opportunity for maximum number of people to get benefit from the return obtained by directing the economy towards productive sector by mobilizing the long-term capital. The objective can be fulfilled only by the rational and accountable behavior relating to the three factors of the capital market such as institution, mediator and investor. Rational and high moral character and accountable behavior of institutions such as the government, central bank, stock exchange board, stock exchange, organized institutions for accumulating capital from the market, mediators in the form of manager for issuing security, creator of market, manager for investment, security dealers such as brokers and investors in the form of government bond holders, ordinary shareholders, preference share holders, debenture holders and ordinary mutual fund holders help to develop healthy capital market on the one hand and help to expand foreign exchange activities on the other.

Participant of institutional investors is quite significant for the healthy development of capital market. To invest in capital market the participation of banks and financial institutions is vital . The government has to create an encouraging environment for security transaction for the investors of capital markets. This can product positive impact on public investors. Bank and financial institutions need to participate as security dealers in this regard. A favorable situation that helps to provide competitive return to the shareholders and create to encouraging situation to participation of general public. In general, making arrangement for the implementation of accounting system including cost adjustment according to the international standard, the number of companies are established and the share invest is expected to increase to a considerable amount to due to the enhancement of faith of industrialists and the general public on capital market. Thus the number of enlisted companies will be increased and there will be considerable improvement in their economic and financial condition. Similarly, depth and width of the capital market could increase the initiation of the system of accumulating capital by issuing different types of security according to the interest and types of the deposits.

In the context of making necessary arrangement of protecting investors' interest and right, such interests and rights will protect and make more secure with the implementation of granting of permission to issuing shares to standard companies. Security dealers including promoters have to involve in establishing companies/directors will work according to the professional norms and standers, and to maintain full transparency by disseminating information of market, which are must for foreign exchange market and capital market as well. There will be noteworthy increment in qualitative as well as quantitative security in the security market due to such factors as the entry of only the standard companies in security market will maintain economic discipline in the capital market on the one hand. Full transparency of companies and transaction of security with difference characteristics on the capital market has to maintain on the other. As a result, allocation efficiency and utilization system will develop resulting from the development of market system based on supply and demand in the economy of the country.

Forex and Global Economy

2010-01-04T17:53:00.000-08:00

The global economy in recent years has become even more liberal, broader and more integrated in the world. It has identified as competition among nations in international arena in the attempt to secure market for their goods and services and it has also increased the possibility that the economic phenomenon of one corner of the globe can immediately have a contiguous effect on the other corner. The flows of increasing capital and technology in the world have brought about changes in the structure of foreign capital and thereby enhanced the possibility of external instability of the economy as well. In this context, the past concept of international cooperation has changed, and the concept of trade, not aid is taking root its place. By gradually integrating into, but not isolating from , this changed economic situation of the world, our present need is to strengthen the balance of payments for external stability and promote trade while taking the maximum benefit from the wide market prospect.

In recent years there appears a tendency in the investment of developed countries to channelize some part of their investment towards the stock exchange of developing countries. The main reason for this is the expectation of getting comparatively more benefit from the capital market of developing countries. In order to capitalize this opportunity developing countries have to a limited extent given concession for foreign participation in the stock market. In developing countries the balance of payments situation is directly or indirectly related not only with the external stability of the economy, but also with other aspects of the economy, particularly monetary, financial, foreign exchange and investment, internal production and price. This a whole reflects the competitive capability of the economy with the outside world as well as the external purchasing power of currency.

In the context of the economy of the developing countries with limited production capacity and the compulsion to unlimited goods and services as well as the lack of broad export competitiveness accordingly requires to maintain an adequate level of foreign exchange reserves. The import of necessary capital equipment for economic and infrastructure development and the obligation of timely amortization of foreign loans need to continue to increase in the future. In attracting foreign capital and technology direct and indirectly, the level of adequate reserves of foreign exchange constitutes a precondition of investment. In the changed global context, although there should not much volume for being encouraged towards foreign grants.

Role of Corporate Governance

2010-01-01T03:27:00.001-08:00

As with nations, governance matters profoundly in the success of individual commercial enterprises. An examination of businesses that have rained success over long periods reveals boards that have governed affairs of the business effectively. Likewise, with businesses that have performed poorly, it is rather common place to track the problems to that have not addressed the issues confronting their businesses effectively. In a corporation, there is a board of directors which is responsible to guide the executive committee or management body containing the Chief Executive Officer (CEO) and supporting hands to CEO to run the corporation in proper way by following the instruction made by the Boards of Directors and to meet the objectives of the corporation.

The management of a corporation is usually accomplished under the leadership of a Chief Executive Officer (CEO), who reports to the board of directors and committee as well if any. While boards play a variety of roles, effective organizations acknowledge the board's role in selecting the Chief Executive Officer, advising on and consenting to the selection of businesses and strategies, and overseeing. The test of the effectiveness of governance is the degree to which any organization is achieving its purpose and objectives. While many of the principles have application to organizations with a wide range of purpose and objectives of the organization. In order to address the governing of publicly owned businesses whose purpose is to create and serve customers the focus of boards is found narrow speed. But the reward system plays a vital role for the organization of which, if an employee done well and because of well performance of employees the organization is profitability and a concomitant improvement in shareholder value.

An important distinction between publicly owned businesses and privately owned businesses is that privately owned businesses tend to be owner-managed. Because the owners of private businesses are typically directly involved in their enterprises. They are better informed about the affairs of the business and can reasonably represent their own interests. They have not delegated control to a representative board of directors. Thus the potential conflicts of interest that exist between investors and those who have been hired to run the business are not as relevant. Even so, many of the governance principles that apply to publicly owned business are also applicable to privately owned businesses. Thus the board of directors of the publicly owned corporation is the, focus of corporate-governance..

Forex and Electronic Trading Systems

2010-01-01T02:00:00.000-08:00

Electronic platform is the gateway to an open market place in which each participant could access real time price discovery and trading functionality. Similarly, market place offer electronic access to futures market, allowing participants across the globe to optimize trading operations and strategies through seamless execution on a single platform. Electronic trading is available through a variety of interface alternatives; including Internet based front end, independent software vendors and brokerage firms.

The speed and efficiency with which large trades may be executed through electronic trading systems provide significant benefits to trade marketplace participants. However, these characteristics can also exacerbate the adverse consequences of trades executed through such systems that, in light of the prevailing market for a particular commodity, in the marketplace are clearly erroneous.

These consequences may extend beyond the participants to the trade and even the contract that is the subject of the trade, and affect the integrity of the market as a whole. Market integrity is enhanced. It is therefore when the exchanges that operate electronic trading systems have in place well defined policies and procedures pursuant to which requests to cancel clearly erroneous trades may be promptly considered and resolved could be defined as follows:

To reduce the number of erroneous trades that price limits could be effected through an electronic trading system and exchanges should be consider implementing price limits or similar controls, which would reject, or at a minimum require a market participation to reconfirm, any order outside such limits prior to execution.
To assure that only erroneous trades that may significantly and adversely affect other market participants are subject to cancellation and exchanges should adopt a "no bust range" within which price range trades may not be subject to cancellation even if executed in error.
To assure the prompt resolution of requests to cancel erroneous trades, exchanges should establish narrow time frames within which a party may request that a trade be can celled and the exchange determines whether to cancel the trade or take other appropriate action.
To assure that market participants are aware that an erroneous trade may be canceled exchanges should implement procedures to provide prompt notice to the marketplace of both a request to a cancel a trade and the ex changer's decision with respect to such request.
To avoid uncertainty among market participants, exchange should adopt policies that identify the types of other transactions that will be canceled if an erroneous trade is canceled.
Electronic trade attracts to that point which is not executed as a trade. Executed order can't be canceled and accountability is with client or broker itself.

Forex and Investors

2009-12-30T21:25:00.000-08:00

Forex investors look for a fast-paced dynamic with excellent liquidity that can act as a counterweight to the commodities in their portfolio will want to learn more about the forex exchange and metals futures markets. The challenge in meeting the price volatility takes place in the vigorous give and take among the traders on the foreign exchange where the best up-to the minute price emerges from their consensus. The price quotations are then used as benchmarks by buyers and sellers in the foreign and metals markets worldwide. Futures prices are not predictions, but are the collective current opinion of the marketplace of where prices appear to be heading. That opinion and the direction of prices can change in an instant , which makes trading these markets so challenging potentially rewarding. An individual or a firm, registered with the exchange that receives compensation for giving people advice on options, futures and the actual trading on managed futures accounts. Managed futures are investments that allow the investor to access the futures markets through the services of professional managers known as commodity tradings advisers.

Alternative investments utilize a diverse range of financial instruments and are flexible in their investment options. Many alternatives investment managers are highly specialized and trade only in their area of expertise while others focus on the advantage of trading a broad, diverse range of opportunities. Participating in futures trading is through a commodity pool, which is similar in concept to a common stock mutual fund. A commodity pool operator is defined as any person engaged in a business which is of the nature of an investment trust, syndicate or similar for of enterprise and who in connection therewith, solicits, accepts or receives from others, funds, securities or property, either directly or through capital contributions, the sale of stock or other forms of securities, or otherwise for the purpose of trading in any commodity futures or commodity pools are organized as limited partnerships, with the general partner as its commodity pool operator.

Market makers post publicity observable bid and ask prices. It is considerable that an initial equilibrium with which there are no market makers but there is free entry of middlemen with heterogeneous transactions costs. Characterization conditions under which entry of a single market maker can be profitable even though if is common knowledge that all surviving middlemen will under cut the market maker's publicity posted bid and ask prices in the post entry equilibrium. The market maker's entry induces the surviving middlemen to reduce their bid-ask spreads, and as a result, all producers and consumers who choose to participate in the market enjoy a strict increase in their expected gains from trade. When there is free entry into market making and search and transactions costs tend to zero, bid-ask spreads of all market makers and middlemen are forced to zero and a fully efficient.

Forex and Warehous Receipt

2009-12-30T20:01:00.000-08:00

The term "Warehouse Receipt" has been defined as the receipt of ownership of particular commodity which intends to deliver for the particular time frame. "Receipt" a means a Warehouse Receipt in the prescribed from issued by a Warehouse Man to a person depositing goods in the warehouse. A licensed warehouse an is authorized to issue a negotiable or a non negotiable warehouse receipt. It evidences a contract for storage of goods. It is accepted by the commercial banks as collateral security for grant of loan against the goods stored in the warehouse. A warehouse receipt can be negotiated by endorsement and delivery. It is a document of title of goods and in case of failure to liability it shall create contractual obligation to issuer. The goods covered by a negotiable warehouse receipt can be transferred by an endorsement on the Warehouse Receipt and its delivery to the endorse.

A person whom ware receipt is negotiated acquires a title to the goods in respect of which such warehouse receipt has been issued. The endorsers gets a right to have the possession of goods covered by such warehouse receipt as per the terms and conditions contained in such receipt. The endorsers also gets a right to have such goods delivered to him/her or his/her authorized agent by the warehouse man. Warehouse receipts are a crucial element for risk mitigation, enabling a financier to lend to a borrower, who wants to finance the shipment of commodities for sale or purchase. Using warehouse receipt finance, a bank or trader, relies on goods in an independently controlled warehouse to secure financing. Usually providing (among many things) there is an off-taker and that there are other forms of recourse (the borrower's balance sheet for example) banks will lend against commodities stored in a reliable warehouse and which have been properly pledged to them in a sound legislative environment.

So warehouse receipts provide for a degree of physical risk mitigation and. in support of an exchange-based trading system, they are important for underpinning futures. Accordingly, warehouse operators can act as key influence rs of risk management . If they are able to issue warehouse receipts, which can be used as collateral by banks, they may use this as a way of encouraging delivers of commodities to move stocks into their facilities. Warehouse operators receive goods into the warehouse and issue Receipts shoeing the goods has been received into the store. Among other things, the receipts themselves contain information about the quality and type of the commodity taken into store. The receipts are for the information of the depositor of the goods or, if he/she is a borrower, for his/her bank.

The Corporation

2009-12-27T03:15:00.000-08:00

The non-business corporation is an ancient form, originally used for towns, guilds, and colonies in Rome and from the early Middle Ages, also for universities religious orders, and other so-called benevolent organizations performing civic services and thus subject to government license and oversight. "The Muscovy Company in 1555, the Spanish Company in 1577, and East India Company in 1601 received history's first recorded business charters of incorporation during the region of England's Queen Elizabet. The London Company, soon to be called the Virgina Company of London, followed in 1606. Prior to the corporation, businesses were organized as proprietorship or partnership.

The United States Supreme Court under Chief Justice John Marshall made corporations possible legally in the early nineteenth century. Marshall defined a corporation in Dartmouth College v. Woodward in the following terms:

A corporation is an artificial being, invisible and existing only in the contemplation of the law. Being the mere creature of law, it possesses only three qualities which the charter of its creation confers upon it, either expressly or as incidental to its very existence. The most important are are immortality and if the expression may be allowed individually, properties by which a perpetual succession of persons are considered as the same and may act as a single individual.

In summary, the corporation is a creation of the law and has legal standing independent of its owners. Three features have made the corporation action attractive-its unlimited life. the limited of the owners, and the divisibility of ownership that permits transfer of ownership interests without disrupting the structure of the organization. In recent years, tax considerations have become increasingly more problematic for standard or so-called Corporations. The tax problems associated within corporations have been mitigated in the recent years by the availability of Internal Revenue Service tax code and the Limited Liability Corporation created by state charters. Limited Liability Corporation have all the benefits of the corporate form, but their profits are taxed at the ownership level. This is in contrast to the traditional corporation, where the corporation itself, rather than the owners, pays taxes on profits. After its legal establishment, the corporation quickly became the preferred form of organization for larger enterprises.

Economic Systems

2009-12-27T02:46:00.000-08:00

Business function in complex economic systems, each with its characteristic ecology. We can view these systems using the analogy of a game, where participants typically complete within the rules of the game to get ahead. Such games have been played throughout recorded history and have developed in complexity and reach, with most changes having occurred within the past two centuries. Initially, though, the games wee mostly local, confined to villages, townships, and small geographic regions. In the last several hundred years, they expanded and grown to encompass whole nations. Currently, the games are becoming more global, with nations banding together to form economic unions. For the most part, though, the rules of the economic systems we describe are determined predominantly at the level of national governments, with restrictions eased or eliminated for member countries of economic alliances.

The nature of the game in each nation reflects a number of variable; the culture, the education of the population, the political system, the geography, and the available capital and natural resources. These attributes influence the creation of an infrastructure that supports the game. Of particular importance in this infrastructure are national defense and public safety, the nation's transportation system, and its legal system, both criminal and civil. The criminal system protects people and property and ensures domestic social order. Likes wise, a strong military protects the nation from attack. The civil system arbitrates and enforces contracts an personal property rights. We find that within the context of the resulting organizational infrastructure, the game is influenced and substantially determined by three distinct institutions, the government, regulatory and law-enforcement agencies, and finally, those individuals or groups who choose or are forced to operate outside the rules of the game.

The governance system can create rules that enhance prosperity or retard it. This is a complex topic that is the source of constant debate and considerable tension. Social conscience and populist politics push us toward a broad distribution of wealth, the logical extreme of which is a highly, they failed repeatedly to produce a great deal of wealth for the masses. The reasons for this failure can be found in human nature. Such systems do not induce purposeful, productive behavior on the part of individuals. On the other hand, letting disproportionate wealth accrue to a very few individuals has been equally destructive of prosperity. The enduring challenge for this grand economic game is to find the balance between these extremes. What a society does with the largess of its output influences the health of its economic system and consequently, in a fashion, its output.

Market Competition

2009-12-25T10:06:00.000-08:00

Two international food chains namely Domino’s and Pizza hut made its entry into Indian market in the same year i.e. 1996. Looking at the figures given, it becomes apparent that by 1999 Pizza hut had covered 46.42% of market share which is two fold of Domino’s. Interestingly, in the following year, it was Domino’s that dominated the market share with its 70% coverage in comparison of Pizza Hut’s 18% coverage. Likewise, by 2001 Domino’s had far exceeded pizza hut in setting up the numbers of outlets all over that stood at 101 in total. It would not be an exaggeration to say that it was mainly the marketing strategies they adopted that helped Domino's win an edge over its competitors like Pizza hut in a short span of time.

It is, however, interesting to know how a big US fast food chain had to resort to a new transformation in their unique flavor as it dared to cater to the Indian Palate. Given the potential market, possibly it was wiser for them to localize the flavor than to persuade finicky and choosy population to change their taste. Hence, they opted to enter into market as franchise rather than company owned restaurant. As a resultant, Domino's Pizza in not only varied from what was available in other countries but the variation in taste existed between the different regions in itself, gaining them substantial market coverage.

Domino's gave a new definition to home delivery when they integrated the service with time management. They guaranteed a compensation of Rs 30 off the price tag to client if they failed to delivery within half-an-hour of the order being placed. When Pizza hut were busy advocating that pizza was not to be delivered for its freshness, Domino's had overcome this problem as they opted to use a hot bag for packing that kept pizzas oven-hot till customer's doorstep.

Domino's used high quality of ingredients to make pizza as they always focused on offering comeback value to their customers. Since Indians were also value sensitive not price sensitive, they well accepted 12" pizza that were priced at Rs. 265. However, due to competition, Domino's started offering discounts, freebies that later counted up to 50% of its total marketing budget. They used this money to send mailers which carried the name of discovery channel. As Domino's and Discovery channel had a tie-up with each other, the channel advertised Domino's pizza in return. At the same time, they started offering pizza training classes to school students. In line with their strategy, in 1998, Domino's analyzed their database and gave away a clock to their loyal customer who had bought Rs. 15000 worth of pizza in the particular year.

Marketing Strategies

2009-12-23T22:51:00.000-08:00

Marketing is fundamental to any businesses growth. And marketing profoundly affects our day-to-day lives. In this sense, inbound marketing and outbound marketing is known an marketing strategies. It is embedded in everything we do-from the clothes we wear, to the Websites we click on, a number of advertisements we see on our front. Good marketing is no accident but a result of careful planning and execution. It is true that if a business owner does not pay attention to their product/services and their consumers' willingness and demographic, the business would not be able to endure longevity. In also true sense, marketing is a never ending pursuit all over. There is no place for those who want to relax. It is here when the effectiveness of inbound and outbound marketing strategies comes into picture if one has to stay in the race.

This ultimately determines who survives and who does not. How well one has positioned itself in the mind set of customers largely determines the life span of his/her product. Inbound Marketing known as entails activities as market research, competitive analysis, pricing, positioning, naming and branding. Where as outbound marketing focuses on advertising and promotion, public and media relations, sales, customer service, customer satisfaction. The tools and methods used in marketing may vary from one firm or company to another firm or company. For any firm or company, market research is like mapping out before one sets out on an excursion. It is like building a foundation of today on which we put up our business plans tomorrow. Hence knowing our customers inside and outside willingness, need to apply proper tracking of market.

Outbound marketing, on the other hand, are geared to communicate to the market. With outbound marketing, a marketer generally trends to get his message across to the customers. Advertising for instance helps to grab the attention of the consumer whereas, promotion keeps the product in the minds of the customer and helps stimulate demand for the product. Increasing competition is forcing businesses to pay much more attention to satisfying customers, including by providing strong customer service. Organizations have started putting more value of retaining an old customer than creating a new one. They have realized that the word of mouth can provide good exposure at minimal cost rather expending huge amount for advertisement through difference medias . Outbound marketing, if we analyze carefully has more immediate impact than inbound marketing. For instance, opening 'Sale' too often can devalued the products positioning in the consumers mind. More aggressive marketers are becoming with outbound activities, on the one hand. The people have developed more ways to block it from reaching them on the other.

The Evolution of Governance

2009-12-22T08:08:00.000-08:00

Early in antiquity, the hard labor of subsistence living was transformed gradually by the invention of tools with the beginning of technology. With the development new sources of energy - first the steam engine and then electricity and the internal combustion engine -came machines that dramatically increased productivity. In the past 50 years technological advance in practically every field have exploded, nearly all traceable to the invention of the transistor. With the subsequent development of digital technology, it has been seen that revolutions in electronics, communications, transportation, medicine and all forms of manufacturing, leveraged by an exponential increase in our ability to gather and disseminate information. A requisite driver of these evolutionary forces has been the advent of universal education. The breakthrough that made education more readily available to the masses was the great invention. The evolution of printing that followed ushered is growing literacy that became the foundation for an educated populace. It is recognized that the impact of this innovation in the axiom.

As widespread literacy spawned education that has driven technology, there has been a comparable evolution in how we govern our affairs. People have been living in groups from the beginning, first as hunters, gathers and fishermen and then in agricultural societies and eventually in industrial societies. From the outset, humankind has sought to discover the best ways to make decisions for its groups - to find ways to govern so as to resolve disputes, control destructive, and achieve goals that advance the mutual welfare of the members of the society. The effectiveness of a given approach to governance has determined to a large extent, the survival and prosperity of that society. In the beginning, groups of people were small, simple, and located at one place. Their governance processes could be equally simple. Over time, these groups have become large, complex, far-reaching organizations. Tribal and feudal fiefdoms have evolved into nation-states. Small local proprietorship have evolved into large corporations. Their decision-making processes likewise have matured to reflect the more complex governance issues.

Among the seminal breakthrough in this journey from simplicity to complexity in governance were the social revolutions of the eighteenth and nineteenth centuries. Prior, as societies grew, they became progressively more stratified, with smaller ruling classes accumulating greater wealth generated by the labors of the subservient masses. Rich nations became ever more powerful and by force, colonized weaker nations, particularly those endowed with an abundance of natural resources. For centuries, governance was exercised by a privileged few who had gained power over the many. The powerful ruled until they were overthrown by a revolt from within or defeated by a conqueror from outside. However, the nature of the society seldom changed; it was simply a case of one monarchy or dictatorship replacing another. Some were competent and benevolent, and the people benefited.

Human Resources and Technology

2009-12-21T07:16:00.000-08:00

The human resource information is "the composite of databases, computer applications and hardware and software necessary to collect/record , store, manage, deliver, present and manipulate data for human resources" (Broderick and Boudreau 1992). Human Resources Information Systems has given in popularity since the 1960. Many companies today use the Human Resources Information Systems to support daily human resource management operation. Human Resources Information Systems is now used not only for administrative purposes but also for strategic and business decision-making purposes. Human resources without technology is becoming an unthinkable proposition. The potential for efficiencies and productivity gains are clear. The leading initiatives over the past year have included business process improvement, establishing an human resources systems strategy and business intelligence activities.
The most common automated applications in administrative human resource areas are payroll, human resource managed system and benefits administration. Organizations still have work to do in implementing service delivery applications like, benefits-related self-service, simple management reporting, employee self-service and time management self-service. In the year ahead, human resources management systems costs will be higher for outsourced options. It needs organizations to review and analyze the potential impact on their organization of any decision to either in-house or out-source a function. With the advancement of technology, some human resources professional fear being replaced, when in actually, technology is a resource to be used in advancing human resources ever increasing role. Unfortunately, at many companies. human resources is still perceived as a cost center and is not considered to be a direct contributor to the bottom line. Though challenged to find time, human resources professionals agree that the focus needs to be strategic. With the right technology, human resources can prove its value on several levels. Powerful, Internet based electronic enrollment systems simplify administrative, ensure the security of valuable information over antiquated paper formats, and free up time for critical management tasks, elevating human resources value.

Technology can never replace the human touch needed for the human resources position, it can only enhance the value of the user. By multiplying time available, adding accuracy and command of information. Human resources is made whole in a commonly fractured position with many hats to wear. The human resources should address the changes that the new system will introduce. These are not limited to system functionality, but must include new business process and work flows that will improve the operation of not only human resources but the overall organization. Human resources should group changes in process to be introduced by the new system by the length of time it will take to implement them. Advanced benefits systems today track eligible with real-time access to information giving human resources the ability to instantaneously obtain individual and company snapshots. The need to print and mail forms is eliminated with direct to transfers and communication to benefit providers, in the format most desired.

Economic Development

2009-12-21T01:59:00.000-08:00

The societies of the developed countries in the world of the twenty first century live in unprecedented prosperity. These nations have produced the highest standard of living for the most people in the history of the world. It is believed that the origin of this prosperity lies in the development of an economic system that embraces, for the most part, free enterprise, capitalism and competition. Free enterprise brings to the economies of developed countries the sustained energy of competition among contemporary countries, in which the creative minds of countless individuals are unleashed to pursue their individual best interests, the more unfettered by regulation the better. The initial step in this amazing journey of economic development was thus the realization that the greater good would be served by each individual diligently seeking to optimize their own best interests.

The concept of the efficacy of the invisible hand led logically to a second notion that as individuals attempt to pursue their separate interests, the inter sections of their interests and objectives result in a natural state of competition. Specially in the realm of business, they have competition They develop systems by this competition for raw materials, labor, customers and investment capital. This competitive environment leads to a survival of fittest regimen that, over time and weeds out the weakest competitions and promotes survival of the most successful. While some people may fear this relentless ferreting out of the less efficient.It is perhaps the most energizing aspect of the system of free enterprise and competition. The third key aspect of such economic system has been the development of modern capitalism in which the capital needed to fund extensive projects and massive enterprises. It is axiomatic that the greater the freedom of our corporate enterprises to compete in search of expansive. As a returns, the greater is the inclination of individual and institutional investors to provide the capital sought.

For the economic development there are three corner stones of the economic system. They are free enterprise, competition and capitalism. With the development of this economic system enterprises of a size and complexity not previously thought possible flourished. There is a need of commitment from the government, political parties, economic institutes with an appropriate and suitable law, rule and regulations. Without an effective system of governance, there would be chaos in human affairs. Such commitment, law, rule and regulation and governance brings order out of the chaos in human affairs. When individuals live together in communities, there must be rules and laws about how they relate to each because conflict among individuals and groups is inherent in the human condition. Most of this conflicts result from different personalities and believe and from a natural competition for limited resources. Some have more serious moral implications, however, because they are rooted in a lack of respect and concern for the lives and property of others, inspired by the basest of human motives.

Economic Growth Theories

2009-12-19T20:34:00.000-08:00

The study of economic growth remained in focus ever since the foundation of modern economics by Adam smith in 1977. Smith cited division of labor or specialization as the major factor responsible for capital accumulation, which is the long run interest of any nation. The concept then was increased specialization would lead to a rising standard of living for the growing population. The theory was challenged by influential writings of Karl Marx and Joshep and Schumpeter. They had no faith on capitalistic economy and advocated for socialistic model of economic growth saying that unrelenting drive towards accumulation of capital would end with destruction of the system.

The concept of growth model, however emerged only after the Keynesian revolution. Three major branches of modern growth theories have been identified. One relates growth rate of the economy's aggregate output to that of its capital stock assuming that labor is combined in fixed proportion with capital. Second, assumes substitutable between labor and capital and says economic growth will vary for varying proportions of capital and labor. The third is the modern Cambridge theory, also known as Kaldor Growth Theory.

Independently developed two models by Sir Roy F. Harrod in 1939 and Evsey Domar in 1946 respectively are treated as one, mainly because economists identify investment as central element of the economic growth process. The conclusion drawn in two models is similar. This growth theory is based on Keynesian approach and explicit considers capital as the factor of production. It assumes that labor is combined with capital in fixed proportion and is used in development economics to explain an economy's growth rate in terms of level of savings and productivity of capital. Hence, in the both cases, the equilibrium will become unstable. It is thus the equilibrium of model Harrod-Domar model is said to the razor-edge equilibrium. If the economy deviates from it in either direction the economy cannot restore its stable position. This model is mostly applicable in development economics during planning. The planners will have and idea on how much the investment must be increased or the savings and productivity of capital must be increased so as to attain a desired growth rate of economy.

Model Solow model is named after the Nobel Prize winner Robert M. Solow. It describes growth theory with an assumption of substitutable between labor and capital. Model Solow Model differs from Harrod-Domar Model from the inception of the concept. As against the assumption of constant proportion of capital and labor in the Harrod-Domar Model, SolowModel assumes the ratio to be variable, due top the possibility of substitutable between labor and capital.

Managerial Communication Skills

2009-12-16T23:09:00.001-08:00

Successful managers exhibit effective managerial communication skills. Manager’s job demands the ability to influence individuals and groups motivating them for the achievement of organizational goals. Managers and executives of medium to large organizations spend 75% of their time communicating internally and externally. Successful managers must be effective communicators, too. Interpersonal communication skills play a vital role in this regard. Managerial Communication develops the knowledge and skills of managers who face an array of persuasive communication challenges. In order to build on the principles and best practices of managerial communication, the manager need to be perfect in both verbal communication and nonverbal communication as well. In recent years, complex for a variety of reasons have been grown increasingly due to lack of appropriate communications skills.

Manager’s job also demands the ability to persuade and influence people through assertive communication. Presentation skills, for example, are critical to any instance managerial communication. In the event of meetings, seminars, workshops or any other public forum- managers need to give presentations. In addition to language skills such as listening, speaking, reading and writing, non-verbal communication skills are equally critical for effective managerial communication. With the advancement of information and communication technologies (ICT), managerial communication has become instrumental and even more challenging for today’s managers and leaders who need to achieve ‘better public image’ and ‘higher productivity’ in terms of betterment of organizational results.

Powerful writing is an inevitable part of managerial communication. Both internal and external communications demand good writing skills. The formal official letters and memos should not be ambiguous. Likewise, the reports and proposals should not be inconsistent in both logic and presentation. The unclear themes, unsupported arguments or illogical statements are instances of poor written communication that can easily confuse the target audience (readers, recipients and respondents). This is why the manager needs to pay attention while presenting reports or participating seminar or workshop. Similarly, moderation and facilitation of team events demand active listening, empathy, attention and paraphrasing in addition to physical presence of the communicators.

Similarly, the managers of an organization should not be articulate and poor seemingly in listening skills. Intents remain implicit whereas actions speak as loud as words in communication, too. The managers should not have a lack of basic platform skills for effective communication. The non-verbal actions such as body language remain inconsistent with the content of the verbal message. This often conveys wrong message and keeps the audience confused. Thus, managerial communication is all about making business communication purposeful, participative and inspiring as an instrument for achieving improved people to people relationship in eventually attaining better organizational results

Leadership behavior and Management

2009-12-16T21:40:00.000-08:00

People who do research on leadership actually disagree more than what one might think about leadership really is. Most of the disagreement steams form the fact that leadership is a complex phenomenon involving the leader, the followers and the situation. Some have focused on the personality, physical traits, or the leader’s behavior itself. Others studied the aspects of the situation that makes leaders to act. Some have extended the latter viewpoint and suggested that there is no such thing as leadership; they argued that organizational successes and failures often get falsely attributed to the leader. They emphasized that the situation may have a much greater impact on how the organization functions than does any individual, including the leader. Therefore the best way to understand the complexities is to see some of the ways leadership has been defined.

There are different ways leader’s approaches to motivate subordinates. Rewards may be in the forms of employee education, greater independence and other satisfactory methods of motivating them. It emphasis is placed on penalties; the leader is applying negative leadership.In real practice managers use a mix of positive and negative styles in getting the things done every day. Leadership style is related to none’s model of organizational behavior. Negative style tends to frighten subordinates into productivity whereas positive style generally results in higher job satisfaction and performance.

There is no doubt that the success of organization, among many others, depends on the leadership style and behavior of the manager. So understanding of the relationship between leadership and management is required. For many, the word management suggests words like efficiency, planning, organizing, motivating, control and regulating and coordination. So managing is the art of getting things done by others. Leadership is often used to refer words like risk taking, dynamic change, vision and creativity. It is value choosing and value adding activity whereas management is not. Leaders are thought to do the right things whereas managers are thought to so things right.

The way in which a leader uses power also establishes a type of style. A leader often uses all three styles over a period of time to deal with the situation. Each style has its benefits and limitations. Autocrat leaders centralize power and decision making in them. The leaders take full authority and assume full responsibility. He/she structures the complete situation and employees are told to do and obey and not allow thinking for them. Autocrat leadership permits quick decision. But autocrat leadership is negative in nature. That is why , is seldom generates strong organizational commitment among employees that lead to low turnover and high absenteeism rates. Participative leaders decentralize authority and encourage employee’s participating in management and problem solving. In participative leadership style employee are encouraged to expressed their ideas and make suggestions. This style is supportive in organization behavior. Free-rein leaders avoid power and responsibility. They pay only minor role and depend largely on group to establish organizational objectives and leave the choice of methods entirely to the group.

The total pattern of explicit and implicit leader’s actions as seen by their followers is called leadership style. It represents a consistent combination of concept, skills, traits, and attitudes that age exhibited in a person’s behavior. Besides, leadership style reflects implicitly and explicitly a manager’s belief about subordinate’s capabilities in collecting the job assigned to them effectively. Many different leaders’ behavior and leadership styles have been classified till now and are found to in practice. Understanding of various leadership styles need to be understand by the Manager to enable him to perform in the best leadership style to attain the management objectives.

Leadership behavior

2009-12-15T03:11:00.000-08:00

Many researchers have focused on identifying leadership behaviors. In this view most have opine that successful leadership depends more on appropriate behavior, skill and actions and less on personal traits. The three broad of skill leader's use are technical, human and conceptual. Technical skill refers to a person's knowledge of and ability in any of process or technique. For examples accountants, engineers have their separate technical skill in their work. Technical skill is the disguising feature of job performance at the operating and professional levels. However, at the higher level technical skill become less important as manager increasingly depends upon the technical skills of their subordinates. Human skill is the ability of work effectively with people and to build teamwork. Managers are successful only if they can get the job done by their subordinates effectively. So it is a major part of leadership behavior. Conceptual ability is the ability to thing in terms of models, frameworks and broad relationship in planning and implementation. It is the most important in managerial job. Conceptual skill deals with ideas, while human skill concerns people and technical skill involves hings. Therefore analysis of leadership skills is required in order to get the organization success.

Leadership behavior is the determining element in accomplishing organization's objectives. But appropriate leadership depends on there variables leaders, followers and situation and their relationship between each other. What makes the leader? The answer is simple who has follower in situation. With few exceptions, leaders are also followers. Follower-ship behavior helps them to get support from higher authority and to support their followers in their work performance as leadership is a part of complex system he or she must possess good leadership style Aggressiveness amid constant interaction with others will not guarantee good leadership. He/she must have ability to recognize different situations and to adopt them on a conscious basis. That is leader must be more decisive, directive and controlling.

Organizational success begins with the effective leadership. Managers are good leaders. Therefore, top management must develop the following to be effective leaders, they are clears belief, clear objectives, clear mission statement, clear and effective strategies and supporting plans, design, appropriate organizational structure, encourage employees' participation and continuous improvement. In short, managers' leadership style must aim at effective and efficient use of resources. Managers must be concerned with getting the job done and people as well. Leadership must be concerned with task and with social need of the employees depending upon the employee's maturity. The key to manager;s success lies on the behavior of being employee oriented rather than being task oriented. He/she must develop effective communication system-up, down and across the organization and also take action on what is communicated for continuous improvement.

Global Trends in Social Enterpreneurship

2009-12-15T00:44:00.000-08:00

Muhammad a Yunus, a resident in Bangladesh setup the Grameen (Village) Bank in his home country with a loan of just 17 pounds, to lend tiny amounts of money to the poor to whom no ordinary bank would lend. It was his conviction that this new systems of micro-credit would give such people the spark of initiative needed to pull them out of poverty. In as era of heightened concern about poverty alleviation, the idea of such program has proven to be an efficient tool in transforming suffering to hope. Some argue that it takes the responsibility away from the government and leaves poverty as an individuals problem to be solved. However, it is believed that the relevance needs to be judged in terms of the impact it has created at a client level. Charity or donations create dependency where as the concept of social entrepreneurship helps empower the population economically and socially and makes them independent. It helps to build their confidence and also raise their dignity in the society. Hence nowadays, the entrepreneurship approach to social problems is gaining popularity. This revolution is fundamentally changing the society organizes itself and the way we approach social problems.

Unlike traditional business entrepreneurs, social entrepreneurs primarily seek to generate social value rather than profits. And unlike the majority of non-profit organizations, their work is targeted not only towards immediate, small-scale effects, but sweeping, long-term change. Social entrepreneurs are also called change agent for society. They develop innovative solutions to society's most pressing social problems. The ideology of social entrepreneurship believe that is not the lack of skill but the under utility of their skills which makes people poor.

Where others see problems, social entrepreneurs see opportunity. Social entrepreneurs are reforms and revolutionaries but with a social mission. They make fundamental changes in the way things are done in the social sector and seek to create systematic changes and sustainable improvements. Though they may act locally, their actions have the potential to stimulate global improvement, the environment, arts or any other social field. Today, Yunu's system of micro-credit is practiced around the world in some 60 countries. It is acknowledge to be a fundamental weapon in the fight against poverty.

Service Marketing

2009-12-14T07:10:00.000-08:00

The service sector has been growing significantly for more than fifty years to the extent that in the developed world, more people earn living from producing services than making foods. In fact, services add more economic value than agriculture, manufacturing and raw material combined. Likewise, employment is dominated by service jobs and most new job growth comes from services. Of late, manufacturing and technology industries have also recognized the need to provide services not only as a means of adding value to the physical products which they market but also as the basis for a different orientation to the management of their business.

Service sector marketing is the part of industry or business which deals with the marketing and selling of intangible products rather than physical goods. It has also called selling the invisible delivering intangible services as a core product offering. A service tends to be an experience that is consumed at the point where it is purchased and cannot be owned since it quickly perishes. The service sector includes transportation, eduction, finance and insurance, hospitals, industry, entertainment industry governmental services. management consultancy and many more.

Marketing experts identify the following characteristic of services.

Lack of ownership: Service are used or hired for a period of time. For example after getting haircut from a Barber, we cannot own or store his service like for a product. We cannot sell it once it has been consumed and do not take ownership to it

Intangibility: Intangibility is just one factor that distinguishes services marketing from product marketing. Service can not have a real, physical presence as does a product. For example motor insurance may have a certificate, but the financial service itself cannot be touched i.e. it is intangible.

Inseparability: Service cannot be separated from the point where it is consumed and from the provider of the service. For example we cannot take a live theater performance home to consume it. where as a DVD of the same performance would be product, not a service.

Perishibility: Services last a specific time and cannot be stored like a product for a later use. A person could go to a cafe one day and have excellent service, , and then return the next day and have a poor experience. So often marketers talk about the nature of a service.

Variability: No two services will be completely identical. For example, returning to the same garage time and time for a service might five different levels of curstomer satisfaction or speediness of work.

These characteristics affect the way clints behave the buying process and the way organizations must interact with them.

Marketing experts acknowledge that marketing a service is more difficult than marketing a tangible product. The major difference in services marketing and regular marketing is that instead of the traditional "4Ps", Product, Price, Place, Promotion, There aere three addiional "Ps" consisting of people, Physical evidence and Process. Service marketing also includes the services cape referring to the aesthetic appearance of the business from the outside, the inside and the general appearance of the employees themselves.

Capitalism and Enterprises

2009-12-12T23:12:00.000-08:00

The society of the developed countries of the twenty-first century live in unprecedented prosperity. These nations have produced the highest standard of living for the most people in the history of the world. We believe that the origin of this prosperity lies in the development of an economic system that embraces, for the most part, free enterprise, capitalism and competition. Free enterprise brings to the economics of developed countries the sustained energy of competition, in which the creative minds of countless individuals are unleashed to pursue their individual best interests, the more unfettered by regulation the better. The initial step of amazing journey of economic development was thus the realization that the greater good would be served by each of us diligently seeking to optimize our own best interests. While counter intuitive in some respects, this remains an astonishing idea.

The concept of the efficacy of the invisible hand led logically to a second notion that as individuals attempt and objectives result in a natural state of competition. Specifically in the realm of business, we mean by this competition for raw materials, labor, costumers and investment capital. This competitive environment leads to a survival of the fittest regimen that, over time, weeds our the weakest competitors and promotes survival of the most successful. While some people may fear this relentless ferreting out of the less efficient, it is perhaps the most energizing aspect of our system of free enterprise and competition. The third aspect of our economic system has been the development of modern capitalism, in which the capital of many investors can be united to provide the large amounts of investment capital needed to fund extensive projects and massive enterprises. It is axiomatic that the greater the freedom of our corporate enterprises to compete in search of expansive returns. The greater is the inclination of individual and institutional investors to provide the capital sought. The three cornerstones of our economic system, therefore, are free enterprise, competition and capitalism.

With the development of this economic system, enterprises of size and complexity not previously thought possible flourished. Without an effective system of governance, there would be chaos in human affairs. It is governance that brings order out of the chaos. When individuals live together in communities, there must be rules and laws about how they relate to each other because conflict among individuals and groups is inherent in the human condition. Most of these conflicts result from different personalities and believes and from a natural competition for limited resources. Some have more serious moral implications, however, because they are rooted in a lack of respect and concern for the lives and property of others, inspired by the basest of human motives.

Moral conflict nakedly reveals the two sides of human nature- the good and evil. We see the good in acts of love and selflessness, acts of courage, acts of genius in the arts and sciences, and acts of integrity, honor and duty. We see the evil in acts of hate, greed, tyranny, oppression, cowardice and dishonesty. Such struggles between the forces of good and evil have been at the core of the human drama since the beginning of time. The battle takes place within every individual of conscience, as well as between individuals and groups. We see these conflicts playing out in the various forms of government prevalent around the worked and naturally in the realm of modern business.

Macroeconomics and Keynesian Theory

2009-12-12T22:45:00.000-08:00

In 1930s the entire world experienced its worst modern economic depression. It had a severe effect even in most advanced economies and created widespread dissatisfaction with the performance of capitalist or the free enterprise system. The human suffering increased as there was a huge job-cut. The situation was so grave that many economists begun to have a common belief that something was wrong with the traditional theories. Several questions were raised:

- Why were markets not making the kinds of adjustments explained in standard theory?
- Why did demand on consumer goods and services did not increase even when their
prices were falling?
- Why were there so few job opportunities when workers were looking for work?
- Why would unemployed workers remain unemployed rather than work for low wages?

Amongst different opinion put forward by different economists in that period, the most prominent and convincing one was given by British Economist John Maynard Keynes in his world-famous book "A general Theory of Employment, Interest and Money". In his book, published in 1936, Keynes explained the nature and causes of world's greatest depression with the help of his new theory that departed in all sense from those explained by classical economists. The publication of this book established a new era of macroeconomics, which is now regarded as Keynesian Economics or simply Modern Macroeconomic theory. The essence of the theory was depression was due to the lack of effective demand in an economy.

Before the evolution of Keynesian theory, classicists and neo-classicists had ignored the macro-phenomenon in the economy as they were on a strong belief that stable equilibrium is attained in all sectors through market mechanism i.e. the interaction between demand and supply forces in a long run. This simply implies that even wage rate and prices moves both ways – upward and downward – adjusting with the change in demand and supply in an economy. Furthermore, the proposition was that no economy would suffer from over production, as supply will automatically create its own demand.

These concepts proved wrong after the First World War as the world witnessed the great depression of 1930's. In that period production was so high that it oversaw actual economic demand. This led to the decrease in price of goods and services. The decrease in price did not increase the demand but number of industries suffered a heavy loss. The loss resulted in curtailing of employment opportunities and the economy saw a steep rise in unemployment. The wage cut (according to classical doctrine) did not help increase employment. The classical concept of market economy failed and gave rise to the new era of economic thinking led by Keynes.

Gender Difference in Leadership

2009-12-11T08:55:00.000-08:00

There is a popular myth about the gender differences in leadership styles. It holds that women are better team players than men. They are open and handle sensitive issues better. Women are more conscious of their impact on others. Women behave in more democratic way. While on the other hand, men are considered to be more power centric and assertive. They tend to use a task-centered leadership style – such as direction and position power. They are less compromising than women. In the organization, nature of the job and duties are major factors that determines the way of leading a group or organization as a whole irrespective of the gender. For example, it is the demand of the military services that requires either gender to behave in the same rigid way with his/her juniors. In hospitals participation of male doctors and female doctors and crews is equal. In absence of any one side is not possible to provide the better service of treatment to the visitors and patients.

Leadership is a critical ingredient to the success of any organization. The organization’s prosperity is by and large based on the contribution of its workforce. The effectiveness of a person as a leader depends on his strategic vision, good communication skills, creativity, and the ability to trust and empower subordinates which may come from either of the sexes. Hence, any gender can make better leaders as long as they can provide the leadership skills which works as a driving force for his team towards the attainment of the organizational goals. Leadership of the organization is also depends on the nature of organization. The organization which has to provide service to the general people as social welfare aspect could lead by female leader in better way than men. It has been found that some organization like banks is run by only women staffs except guards. Their performance is very good and prompt found. And the general people are attracted with their style of works and appreciate the leadership of the organization.

Very important matter in any organization is that to meet the goal of the objectives of any organization is depends on team work. If the team work is not cooperative there will be barrier to reach to goal post of the organization. The role of each staff (employee) of the organization is vital in their own status. It is really kept wondering on how to move ahead with the given task and often discussed that progressed a bit more if they had a male in the driving seat who would be bit aggressive and risk taker. The leader of the organization should not discriminate among the employees in any discipline. Rule and regulation should be applicable equally to maintain discipline in the organization. It helps to keep organization in working environment and create well atmosphere at the same time. One who is capable to run organization in friendly .environment could be called successful leader whether the leader of organization is leading by male or female.

Modern Business Firm

2009-12-11T07:20:00.000-08:00

A firm is an entity that organizes factors of production in order to produce goods and services to meet the demands of consumers. In the process of supplying the goods and services to the society, firms provide employment to workers and pay taxes that government uses to provide services as education, health, national defense etc. Traditionally, the primary objective of firm was considered only to be profit maximization. However, with the changes in time, the primary goal of the firm has now shifted to value or wealth maximization rather than short run profit maximization. Value maximization can be interpreted as increasing the present value of all future profits. In other words, it is the value of the firm, that is, what a willing buyer would pay for the business.

In this age of globalization and free market, managerial decisions prefer to consider the world as a whole, rather than the region or nation, as the relevant market place. As a resultant, many multinational firms are producing and selling a significant share of their output in other countries by setting up subsidiaries in foreign countries or entering into joint ventures with producers in those countries. This is done mainly for the purpose of market coverage, maintaining and developing raw materials supplies, and comparative advantage offered by the other country. In this process, firms are faced with many barriers and hindrances in terms of resources, quality output and governmental law and legalities among others. The existence of these constraints restricts the range of possibilities or freedom of action of the firm and limits the value of the firm to a level that is lower than in the absence of such constraints.

Firms that are heavily dependent on particular raw material need to ensure that they have continued access to dependable supplies. They are faced with resource constraint especially if the raw materials are only available in foreign countries. Setting up a new firm may also face governmental constraints as regards to anti pollution measures, health and safety standards etc. This may limit the profit maximization motive of the firm subject to limitations on the availability of essential inputs and in the face of legal constraints South Asian countries have the lowest labor cost in the global market. Lower labor cost means high return for the companies. Due to legal restrictions posed by the government of the country, the foreign companies are bound to shun the investment despite their interest.

Good Communication in an Organization

2009-12-08T19:41:00.000-08:00

Communication is essential to building trust and teamwork among employees. To become a successful leader, there must have a great team. Management plays a vital role in the effective functioning of the organization. If the top level management is bogged down in details or specifics, than in making important decisions all the individual persons in the organization will be affected. The first step in that process is for management to accept responsibility for better communication. Unless management takes the initiative, there's no way for communication up and down the hierarchy to take place. After all, employees can and often do express their ideas and emotions. But nothing can happen unless someone in management allows it to happen. A better workplace communication is to create a climate within which communication flows freely and readily.

Modern means of communications have helps a lot in information and ideas sharing, but together with this cannot deny the fact that the ringing of mobile phones, talking across, mobile instant messages, online instant messages, and telephone calls during the conversation or discussion or meeting period not only distracts the person from the topic but also deceases the credibility of the topic resulting into poor outcomes of the entire themes. Hence, to overcome noise certain organization ethics and norms should be followed. For the purpose of communication within the organization or from outside the organization managerial task in this regard is important. If the communication is done freely with each other even with staff and boss, outcomes could be expected in positive sense. If there is some barrier in between staffs and boss, may be not clear what they wish to communicate each other. So, with freely environment two way communications in the organization must arrange.

In this competitive and complex business environment effective business communication is the means for the success the organization. It is an effective tool which deals with the compound situation and improves the chances of the achievement in business. It also facilitates to reduce the internal conflict in the organization and poses the healthy working environment at workplace. Here communication means two way or reciprocate communication. One way communication is not effective. One way communication could be said as one actor communication. One way communication is only listening to the communicator. There will not be any reaction. So, it is not effective. In the organization there must be two way communications. This would be effective to have prompt response and reaction. This could help to discharge employees their own responsibilities in better way as good performance. It also bonds the member of the organization as well as the external people associated with them for positive actions.

Communication in Workplace

2009-12-07T03:22:00.001-08:00

Workplace communication takes in all the various ways in which we communicate with managers, employees, suppliers, and other key people. It may be as informal as chatting with a colleague about a project, or as formal as preparing a detailed report on the organization’s long-term strategy. It is virtually impossible to sell any type of good or service without effective business communications. Hence, it is critically important for a business to ensure that its customers are provided with such communications. On the other hand, it is equally important to make every effort to provide a company's employees with a similar standard of communication. Poor communication is the source for arising conflict in an organization. No matter how unintentional, poorly written internal communications can result in a lowering morale, hurt feelings, a loss of productivity and increased absenteeism and employee turnover. The effective message should provide practical and factual information rather than impressions. It should be precise, clear and concentrate on the information you are trying to give.

The main forms of communication falls into three board categories: Internal Operational communication, External Operational communication and Personal. Internal Operational communication occurs inside the organization to discuss on internal plans. It includes orders and instructions from Supervisor as well as exchange of ideas among the staff. This can be in oral exchange among workers about work matter, emails, intranet, portals etc. External Operational communication takes place with the people and groups outside the organization like suppliers, customers and general public. It can be in the form of brochures, phone call, radio, television or presentations. It carries the image of the organization to the pubic. Personal Communication is not concerned to business but more on exchange of information and feeling. Although it is not the part of the business communication personal communication can have significant effect on the success of plan.

Workplace communication occurs in different ways like written, verbal and non-verbal. In our day to day work we are communicating with various levels of people in different ways. Communication is the link between people and information. The message send out from one person to another is not always received in the same manner by the receiver. The understanding of message largely depends upon the level of the person, perception and ways of thinking. Hence, target audience should be clear while designing the message. Personal information like age, education level, background, and race should be considered while preparing the message. On the other hand, not only the sender has the responsibility to send a clear message and ask if the message is understood, the receiver has equal responsibility to make sure he/she understands the message, by careful listening, asking questions and giving feedback.

Organizational Structure

2009-12-06T04:18:00.000-08:00

Organizational structure depends on the product to be developed in the national level and international level. In order to meet the product to be developed to meet entire objectives, two types of organizational structure (a) functional organizations and (b) project organization could be organized. Functional organizations are organized according to technological disciplines. Senior functional managers are responsible for allocating resources. The responsibility for the total product is not allocated to a single person. Coordination occurs through rules and procedures, detailed specifications, shared traditions among engineers and meetings. Products that need a high level of specialized knowledge require a functionally organized structure.

The different is the addition of a product manager who coordinates the product creation activities through liaison representatives from each function. Their main tasks are: to collect information, to solve conflicts and to facilitate achievement of overall project objectives. Their status and influence are less as compared to functional managers, because they have no direct access to working-level people. The product manager has a broader responsibility. Manufacturing, marketing and concept development are included. The status and influence of the product manager, who is usually a senior, is the same or higher as compared to the functional manager.

A project organization exists of product oriented flows: which are project and teams and can not be separated with each other. The project members leave their functional department and devote all their time to the project. They share the same location. The professionals are less specialized and have broader tasks, skills and responsibilities. The functional manager is responsible for the personnel development and the more detailed technology research in the functional groups. Companies can be classified to their organizational structures. Other variable companies can be classified to be the nature of the projects undertaken. The characterization of projects is introduced by the number of employees needed to perform the tasks, or workload, and the number of tasks that are fundamentally different in nature.

A project organization is also known as policy and design making body to fictionalize the entire target and meets the product of development with the help of groups of difference divisions have been set to perform own responsibilities. Responsibility of every employees of project organization is set to carry out as a team work. Without team work, the project organization would not be run properly to make a favorable and suitable environment for functional organization. So, it can be said that the characterization of functional organization is depending on project organization and project organization and functional organization have to exist in the same pattern and ways. They should never go parallel.

Traders in Foreign Exchange Markets

2009-12-05T22:50:00.000-08:00

A trader in the foreign exchange market is involved in selling or buying one currency against another currency. There are no any types of correlation between the foreign exchange market and the stock market. A bull market or a bear market for a currency is defined in terms of the outlook for its relative value against other currencies. If the outlook is positive, we have a bull market in which a trader profits by buying the currency against other currencies. Conversely, if the outlook is pessimistic, we have a bull market for other currencies and traders take profits by selling the currency against other currencies. In either case, there is always a good market trading opportunity for a trader in the foreign exchange market.

The backbone of the foreign exchange market consists of a global network of a number of dealers. They are mainly based on major commercial banks that they do communicate and trade with one another and with their clients through electronic networks and telephones. as well The foreign exchange market is so vast and has so many participants that no single entity, not even a central bank, can control the market price for an extended period of time. Even interventions by mighty central banks are becoming increasingly inefficient and short lived in the foreign exchange markets.

On the foreign exchange market, there are only six major currencies. This allows a trader to focus and concentrate on which currencies are traded. On the stock markets, most people make money when shares are rising, but in economic recessions and falling bear markets, there is a little chance of making serious money. One of the most exciting advantages of foreign exchange trading is the ability to generate profits whether a currency pair is up or down. A trader can profit by taking a long position by buying the currency pair at one price and selling it later at a higher price or a short position by selling the currency pair and buying it back at a lower price. In either case, there is always a good market trading opportunity for a trader in the foreign exchange market The ability to sell currencies without any limitations is a distinct advantage over equity trading.

Technical Analysis Methods in Forex

2009-12-04T08:53:00.000-08:00

Technical analysis is a short horizon trading methods, positions last a few hours or days, positions for months or years. It is also waiting for exchange rates to return to where fundamentals are pushing them. In contrast, fundamental investors study the economic determinants of exchange rates as basis for positions that typically last much longer, for days or months or years. Similarly, some traders, however, use technical analysis in conjunction with fundamental analysis, doubling their positions when technical and fundamental indicators agree on the direction of exchange rate movements. Following three methods could be applied in the technical analysis:

- The first is that market action discounts everything. In other words, all relevant
information about an asset is incorporate into its price history, so there is need to
forecast the fundamental determinants of and asset's value. In fact, claims that asset price
changes often precede observed changes in fundamentals.

- The second principle is that asset prices move in trends. The predictable trends are essential to the success of technical analysis because they enable traders to profit by buying or selling assets when the price is rising or falling, or as technicians counsel. The trends in motion tend to remain in motion unless acted upon by another force.

- The third principles of technical analysis is that history repeats itself. Asset traders will tend to react the same way when confronted by the same conditions. Technical analyses do not claim their methods are magical; rather, they take advantage of market psychology.
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By following from these principles, the methods of technical analysis attempt to identify trends and reversals of trends. These methods are explicitly extrapolated, that is, they infer future price changes from those of the past. Formal methods of defecting trends are necessary because prices move up and down around the primary or longer- run trend. The exchange rate fluctuates around an and apparent uptrend. To distinguish trends from shorter run fluctuations, technicians employ two types' methods of analysis charting and graphing could be followed. The first methods, involves to find the history of prices over period determined by the practitioner to predict future patterns in the data from the existence of past patterns and experiences. Its advocates admit that this subjective system requires the analyst to the judgment and skill in finding and interpreting patterns. The second types of methods are mechanical rules. It imposes consistency and discipline on the technician by requiring him to use rules based on mathematical functions of present and past exchanges and experiences as well.

Funds of Funds

2009-11-11T07:25:00.000-08:00

Funds of funds are mutual funds which invest in other underlying mutual funds (i.e. they are funds comprised of other funds) . The funds at the underlying level are typically funds which an investor can invest in individually. A fund of funds will typically charge a ,management fee which is smaller than that of a normal fund because it is considered a fee charged for asset allocation services. The fees charged usually disclosed in the funds' annual report, prospectus, or statement of additional information. The fund should be evaluated on the combination of the fund-level expenses, as these both reduce the return to the investor.

Most funds of funds (i.e. mutual funds managed by the same advisor), although some invest in funds managed by other advisors. The cost associated with investing an affiliated underlying fund is most often higher than investing in an affiliated underlying because of the investment management research involved in investing in fund advised by a different advisor. Recently funds of funds have been classified into those that are actively managed (in which the investment advisor reallocates frequently among the underlying funds in order to adjust to changing market conditions) and those that are passively managed (the investment advisor allocates ass est on the basis of on an allocation model which is rebalanced on a regular basis).

The design of funds of funds is structured in such way as to provide a ready mix of mutual funds for investors who are unable to or unwilling to determine their own asset allocation model. Fund companies such as Vanguard, Fidelity have also entered this market to provide investors with options and take "guess work" out of selecting funds. the allocation mixes usually vary by the time the investor would like to retire 2020,2030, 2040, etc. The more distant the target retirement date, the more aggressive the asset mix.

Costs are the biggest problem with mutual funds, these costs eat into your return, and they are the main reason why the majority of funds end up with sub-par performance. What's even more disturbing is the way the fund industries hides costs through a layer of financial complexity. Some critics of the industry say that mutual fund companies get away with the fees whey charge only because the average investor does not understand what he/she paying for. Fees can be broken into two categories:

- On going yearly fees to keep invested in the fund

- Transaction fees paid when we buy or sell shares in a fund loads)

Benefits of Mutual Funds

2009-11-10T04:20:00.000-08:00

A mutual fund is an entity that pools the money of many investors - its unit - holders to invest in different securities. Investments may be in shares, debt securities money market securities or a combination of these. Those securities are professionally managed on behalf of the unit holders and each investor holds a prorate share of the portfolio i. e. entitled to any profits when the securities are solid, but subject to any loses in value as well.

There are many benefits of investing through mutual fund as follows:

- Professional investment management : Mutual funds hire full-time, high level

investment professionals. Funds can afford to so so as they manage large pools of money. The managers have real-time access to crucial market information and are able to execute on the

largest and most cost effective scale.

- Diversificationn: Mutual funds invest in a board range of securities. This limits investment

risk by reducing the effect of a possible decline in the value of any one security. Mutual fund

unit- holders can benefit from diversification techniques usually available only to investors

wealthy enough to buy significant positions in a wide variety of securities.

- Low cost: A mutual fund let's participate in a diversified portfolio for a little amount and

sometimes less. And with a no-load fund, we pay little or no sales charges to own them.

- Convenience and Flexibility: We own just one security rather than many, yet enjoy the

benefits of a diversified portfolio and a wide range of services. Fund managers decide what

securities to trade, collect the interest payments and see that our dividends on portfolio

securities are received and our rights exercised. It also the services of a high quality custodian

and register in order to make sure that our convenience remains at the top of our mind.

- Personal Service: One call puts us in touch with a specialist who can provide us with inform

us can use to make our own investment choices. They will provide us personal assistance in

buying and selling our fund units, provide fund information and answer questions about our

account status. The customer service centers are at our service and marketing would be eager

to hear us comments on the schemes.

- Liquidity : In open-ended schemes, we can get our money back promptly at net asset value related prices from the mutual fund itself.

- Transparency: We get regular information on the value of our investment in addition to d

disclosure on the specific investment made by the mutual fund scheme.

Stock Prices

2009-11-09T22:40:00.000-08:00

Stock prices change every day as a result of market forces. By this we mean that share prices change because of supply and demand. If more people want to buy a stock than sell, then the price move up. Conversely, if more people wanted to sell a stock than but it, there would be greater supply than demand, and the price would fall. Understand supply and demand is easy. The principal theory is that the price movement of a stock indicates what investors feel a company is worth. Don't equate a company's value with the stock price. The value of a company is its market capitalization which is the stock price multiplied by the number of shares outstanding. To further complicate things, the price of a stock doesn't only reflect a company's current value, it also reflects the growth that investors expect the future. The most important factor that affects the value of a company is its earnings.

Earnings are the profit a company makes and in the long run no company can survive without them. It makes sense when we think about it. If a company never makes money, it isn't going to stay in business. Public companies are required to report their earnings four times a year. The reason behind this is analysts based their future value of a company on their earning projection. If a company's result surprise the prices jumps up. If a company's result disappoint, then the price will fall. It's not just earnings that can change the sentiment towards a stock. Dozens of Internet companies rose to have market capitalization's in the billions, without ever making even the smallest profit.

Internet companies involving in the stock markets saw all these valuations did not hold, and most Internet companies saw their values shrink to a fraction of their highs. Still, the fact that prices did move that much demonstrates that there are factors other than current earnings that influence stocks, investors have developed literally hundreds of these variables, ratios and indicators. Some we may have already heard of that such as the price of stock or earning from stock ratio, while others are extremely complicated and obscure with names. We can determine that when we buy and sell that we do know is that stocks are volatile and can change in price extremely rapidly.

The important things to grasp are as follows:

- At the most fundamental level supply and demand in the market determines stock price.

- Price times the numb r of shares outstanding is the value of a company. Comparing just the

share price of two companies is meaningless.

- Theoretically, earnings are what affect investors' valuation of a company, but there are other

indicators that investors use to predict stock price.It is investor's sentiments attitudes and

expectations that ultimately affect stock price.

- There are many theories that try to explain the way stock prices move the way that do.

Unfortunately, there is no one theory that can explain everything.

What are Stocks?

2009-11-09T02:53:00.000-08:00

A stock is represented by a stock certificate. This is a fancy piece of paper that is proof of our ownership. In today's computer age, we won't actually get to see this document because our brokerage keeps these records electronically, which is also known as holding shares in street name.. This is done to make the shares easier to trade in the past, when a person wanted to sell his /her shares, that person physically took the certificate down to the brokerage. Now, trading with a click of the mouse or a phone call makes life easier everybody.

Being a shareholder of a public company does not mean we have to a say in the day-today running of the business. Instead, one vote per share to elect the board of directors at annual meetings is the extent which we have to a say in the company. The management of company is supposed to increase the value of the firm for shareholders. If this doesn't happen. the shareholders can vote to have the management removed, at least in theory. In reality, individual investors like us don't own enough shares to have a influence on the company. It's really the big boys like large institutional investors and billionaire entrepreneurs who make the decisions.

The importance of being a shareholder is that we entitled to a portion of the company's profits and have a claim on assets. Profits are sometimes paid out in the form of dividend. The more shares we own, the larger the portion of the profits we get. Our claim on assets is only relevant if a company goes bankrupt. In case of liquidation, we will receive what's left after all the creditors have been paid. Another extremely important feature of stocks is its limited liability, which means that, as an owner of a stock, we are not personally liable if the company is not able to pay its debts. Other companies such as partnerships are set up so that if the partnership goes bankrupt the creditors can come after the partners personally and sell off their house, car, furniture, etc. Owning stock means that no matter what the maximum value we can never lose our personal assets.

Types of Mutual Funds

2009-11-08T01:33:00.000-08:00

There are many types of mutual funds running in the Markets. It's important to understand that each mutual fund has different risks and rewards and they goes together at the same time. In general higher the potential return, the higher risk of loss. Although some funds are less risky than others, all funds have some level of risk -it's never possible to diversity away all risk. This is a fact for all investments. Each fund ha a predetermined investment objective that tailor the fund's assets, regions of investments and investment strategies. At the fundamental level, there are three varieties of mutual funds:

- Equity funds

- Fixed-income funds

- Money market funds.

Equity funds that invest in stocks represents the largest category of mutual funds. Generally, the invest objective of this call of funds is long-term capital growth with some income. There are many different types of equity funds because there are many types of equities.

Fixed -income funds are named appropriately: their purpose is to provided current income on a steady basis. When referring to mutual funds, the terms "fixed-income" "bond" and "income" are synonymous. These terms denote funds that invest primarily in government and corporate debt. While fund holdings may appreciate in value, the primary objective of these funds is to provide a steady cash flow to investors. Such as, the audience for these funds consists of conservative investors and retirees.

Money market funds consists of short-term debt instruments, mostly treasure bills. This is a safe place to park our money. if we won' t get great returns, but we won't have to worry about losing money. A typical return is twice the amount we would earn in a regular checking/savings account and a little less than the average certificate of deposit.

The idea is to classify funds based on both the size of the companies invested in and investment style of the manager. The term value refers to a style of investing that looks for high quality companies that are out of favor with the market. These companies are characterized by low P/E and price-to-book ratios and high dividend yields. the opposite of value is growth, which refers to companies that have had strong growth in earnings, sales and cash flow. A compromise between value and growth is blend, which simply refers to companies that are neither value nor growth stocks and are classified as being somewhere in the middle.

Gap Trading Stratregies

2009-11-07T03:29:00.000-08:00

Gap trading strategies, the favorites of seasoned day traders, are among the most profitable and reliable of tactics, even though Gap trading opportunities are rare. Experienced day traders are always on the lookout for Gap opportunities. Right after the opening bell, they start examining all stocks they can think of, hoping come across a Gap signal by chance, and then, promptly jump into it to make a kill. They may not find such lucrative opportunities very often. But now, the good news is that Trade trek Gold Service subscribers can easily capture such trading opportunities.

A stock price gaps up and opens higher than yesterday's intra-day high, but soon it drops back to lower than yesterday's high. This kind of gap-up move at market open is occasioned by solid economic influence, so the stock price does not collapse back. In other instances, though, the jump may be sparked by a small group's over reaction, after which the price cannot hold ground at such a level so that it quickly falls. The trading strategy is to short sell the stock when it drops back lower than yesterday's high. Usually the price will continue to quickly drop much further, at which point the trader soon makes a profit. The psychology behind this well used strategy is simple: when it's confirmed that even a good story can't drive the price-up, investors should give up on the stock and but other more promising stocks. Therefore not only will existing holders of the stock sell it: new buyers will be reluctant to touch it, the price soon collapse.

The stocks price gaps and opens lower than yesterday's intra-day low, but soon it comes back higher than yesterday's low. Often times the gap down move at market open may be triggered by reliable economic indicators, so the stock price won't come back. But when the jump is caused by a small group's over-reaction to unreliable news, the price may quickly recover. The trading strategy is to buy the stock when it comes back higher than yesterday's low. Usually the price will continue to quickly rise much further, then the smart trader will soon make a profit. The psychology behind this well-used strategy a simple: when it becomes clear that even a bad story can't keep the price down, investors gain even more confidence in the stock. Therefore, not only the existing holders of the stock hold on to it. nut many new buyers are attracted as well, soon causing the price to rise.

For both gap trading strategies, are provided "the optimal entry and cut less-levels" for the traders reference. These levels are derived from extensive historical back-test data, such that the traders who follow those rules would achieve optimal returns with minimum risks. One useful reference is the average daily price range. In a single trading day, traders should not expect a profit much bigger than the size of the average daily price range. Following the Gap trading strategies , if the trade is already making a profit comparable to the average daily price range. it is time to unwind the trade. Traders can also choose to successfully raise the stop loss level if the trade makes more and more money. In this way, they protect profits an keep the opportunities open for more gains.

Mutual Funds: Advantage/Disadvantage

2009-11-05T23:33:00.000-08:00

Mutual funds have become extremely popular over the last 20 years. What was once just another obscure financial instrument is now a part of our daily lives. In the world, too many people, investing in buying mutual funds in their own countries. After all, its common knowledge that investing in mutual funds is better than simply letting own cash waste away in a savings account, but for the most people, that's where the understanding of funds ends.

A mutual fund is nothing more than a collection of stocks and /or bonds. We can think of a mutual fund as a company that brings together a group of people and invests their money is stocks, bonds, and another securities. Each investor owns shares, which represent a portion of the holding of the fund.

Advantages:

- Professional Management: The primary advantage of funds is the professional management of our money Investors purchase funds because they do not have the time or the expertise to

manage their own portfolio.

- Diversification: By owning shares in a mutual fund instead of owning individual stocks or bonds,

our risk is spread out. The idea behind diversification is to invest in a large number of assets so

that a loss in any particular investment is minimized by gains in others.

- Economies of Scale: Because a mutual fund buys and sells large amounts of securities at a

time, its transaction costs are lower than what an individual would pay for securities transactions.

- Liquidity: Just like an individual stock, a mutual fund allows us to request to that our shares be

converted into cash at any time.

- Simplicity: Buying a mutual fund is easy and minimum investment is small.

Disadvantages:

- Professional Management: How we qualified the advantage of professional management with the word Theoretically ? Management is by no means infallible, and even if the fund loses money, the manager still takes his/her cut.

- Costs: Mutual funds don't exist solely to make our life easier - all funds are in it for a profit.

- Dilution: It's possible to have too much diversification. Because funds have small holdings in so many different companies, high returns from a few investments often don't make much difference on the overall return.

- Taxes: When making decisions about our money, fund manager don't consider our personal

tax situation.

Forex and Face-to-Face Communication

2009-11-05T07:07:00.000-08:00

Communicating with people face-to-face is better than communication through letters, email, or telephone calls. Talking to people face-to-face gives us a better idea and a clear view of what the person is actuflly delivering. If we fail to express ourselves in a proper manner through words then there is a chance of misapprehension and that may lead to problems. Where as, while talking face-to-face our expressions are visible to the listener and he/she can interpret our words exactly. For example, if two persons of two different accents are talking on phone than they ,may have little misunderstanding but when they talk face-to- face they can have a better idea from each other's facial expression as to what they are exactly up to.

In the same way, people from different countries have different accent. Although they manage to speak English as said they may not carry out the same accent as does other. To avoid any confusion face-to-face communication is better where we can frame a better picture of what the other individual is telling.

In other way, when communicating face-to-face we can give ourselves better opportunities than through telephone calls, letters or e-mails. For example, if we consider marketing people, they are more effective when they meet people directly, and they can show their product demonstrate it, clear the doubts of the customer immediately and can show their product demonstrate it, clear the doubts of the customer immediately and can sell therirr product much easily than they could have done through telephone, or letters. Communicating face-to-face leaves the listener with no other chance than to hear you unlike with telephone calls, emails, or letters where in they can be ignored. Nowadays there are various types of communication, the traditional face-to-face conversation, the exchange letters or emails, telephone communications.

Face to face communication is undoubtlyfully more lively and exciting than an indirect one. Firstly, because we use not only speech but also the so called "body" language. Mimics, expressions, gestures can say a lot about the other person's feelings and emotions, something that could not be seen through any type of indirect communication. Moreover, in a convessation we are more natural because we decide what to say on the spur of the moment, while in the written forms of communications we read several times what we have written, correct and rewrite it. That's why conversation are much more vital and spontaneous and many people prefer them to indirect communication.

However, while lively and pleased, talking face-to-face can be also very difficult and sometimes em-brassing. Then letters and e-mails help us to express what we feel. For example, an apologies or request in written form is often preferred. It is not also easy to share with others your deepest feelings and emotions. The best way to express them is to write. Writing has also one more advantage - it can reach different people in different places at different times. There are no spaces or time limits for written speech.

Telephone communication and chatting on the other hand, have common features with both live conversations and letter correspondence. They are much like talking but do not possess its charm and vitality. In the same time they give you the chance to express indirectly what you would like to say and thus avoid an uncomfortable situation. And what's more, through telephone and Internet you can talk with people on the opposite side of the world just as you sit in your chair. So, to sum up, indirect communications, such as letter or e-mail correspondence are very convenient when we want to talk to people, many miles away from us. However, none of them has the charming effect of a real, face-to-face communication.

Relative Strength Index Interpretation

2009-11-01T20:23:00.000-08:00

The Relative Strength Index, developed by Welles Wilder is a special form of the Momentum and probably the most widely used contra-trend-oscillator. Contrary to the implications of its name, the study does not show the instrument’s strength in comparison to other instruments, but rather the instrument’s internal strength compared to its former prices.
The RSI is calculated in several steps: within a given period, the individual differences between the upward closing prices (Close today > Close yesterday) and downward closing prices (Close today < Close yesterday) are added up and afterwards divided by the number of observations minus one. The result is the day’s mean value of the upward and downward strength of the underlying instrument. Thereafter, the relative strength is calculated by dividing the average upward strength by the average downward strength. Finally, you arrive at the RSI by subtracting from 100 the quotient of 100 divided by 1 plus relative strength.
The main purpose of the RSI is to measure the market’s strength and weakness. A high RSI, above 70, suggests an overbought or weakening bull market. Conversely, a low RSI, below 30, implies an oversold market or dying bear market. Additionally, the value of 50, can serve the same purpose as the zero line in other oscillators. The slowing down of a current trend or a trend reversal may be signaled by crossing above or below 50.
Selling when the RSI is above 70 or buying when the RSI is below 30 can be an expensive trading system. A move to those levels is a signal that market conditions are ripe for a market top or bottom. It does not indicate a top or a bottom. A failure swing or divergence accompanies your best trading signals.
While the RSI can be used as an overbought and oversold study, it works best when a failure swing occurs between the RSI and market prices. For example, the market makes new highs after a bull market setback, but he RSI fails to exceed its previous highs.
Another use of the RSI is divergence. Market prices continue to move higher/lower while the RSI fails to move higher/lower during the same time period. Divergences may occur in a few trading intervals, but true range divergence usually requires a lengthy time frame, perhaps as much as 20 to 60 trading intervals. When the RSI begins to fall below the trough formed by a double-top, this may indicate a trend reversal and a buy signal. A double-bottom in the RSI with penetration upward may signal an opposite trend reversal and a sell signal.

Profit And Loss - Cash Settlement in Forex

2009-11-01T02:31:00.000-08:00

The profits and losses of futures depend on the daily movements of the market for that contract and is calculated on a daily basis. For example, say the futures contracts for wheat increases to $5 per bushel the day after the above farmer and bread maker enter into their futures contract of $4 per bushel. The farmer, as the holder of the short position, has lost $1 per bushel because the selling price just increased from the future price at which he is obliged to sell his wheat. The bread maker, as the long position, has profited by $1 per bushel because the price he is obliged to pay is less than what the rest of the market is obliged to pay in the future for wheat.

On the day the change occurs, the farmer's account is debited $5,000 ($1 per bushel X 5,000 bushels) and the bread maker's account is credited by $5,000 ($1 per bushel X 5,000 bushels). As the market moves every day, these kinds of adjustments are made accordingly. Unlike the stock market, futures positions are settled on a daily basis, which means that gains and losses from a day's trading are deducted or credited to a person's account each day. In the stock market, the capital gains or losses from movements in price aren't realized until the investor decides to sell the stock or cover his or her short position.

As the accounts of the parties in futures contracts are adjusted every day, most transactions in the futures market are settled in cash, and the actual physical commodity is bought or sold in the cash market. Prices in the cash and futures market tend to move parallel to one another, and when a futures contract expires, the prices merge into one price. So on the date either party decides to close out their futures position, the contract will be settled. If the contract was settled at $5 per bushel, the farmer would lose $5,000 on the futures contract and the bread maker would have made $5,000 on the contract.

But after the settlement of the futures contract, the bread maker still needs wheat to make bread, so he will in actuality buy his wheat in the cash market (or from a wheat pool) for $5 per bushel (a total of $25,000) because that's the price of wheat in the cash market when he closes out his contract. However, technically, the bread maker's futures profits of $5,000 go towards his purchase, which means he still pays his locked-in price of $4 per bushel ($25,000 - $5,000 = $20,000). The farmer, after also closing out the contract, can sell his wheat on the cash market at $5 per bushel—but, because of his losses from the futures contract with the bread maker, the farmer still actually receives only $4 per bushel. In other words, the farmer's loss in the futures contract is offset by the higher selling price in the cash market--this is referred to as hedging.

Now we see that a futures contract is really more like a financial position, we can also see that the two parties in the wheat futures contract discussed above could be two speculators rather than a farmer and a bread maker. In such a case, the short speculator would simply have lost $5,000 while the long speculator would have gained that amount. (Neither would have to go to the cash market to buy or sell the commodity after the contract expires.)

Money and Games

2009-10-31T07:02:00.000-07:00

Sports are necessary for every human being to stay healthy. But there are many games which doesn’t contribute towards health but in turn endanger one’s life. It’s quite surprising why people choose such dangerous games. However there are many reasons why people are attracted to such dangerous games, which include adventurous blood, fame, earning money, etc.

Firstly, people now-a-days are adventurous blooded. They are bored with this monotonic life. So they need something adventurous, this is the main reason why people are attracted towards dangerous games. There are many games conducted in dangerous places like on hills, forests, etc., For example: Many games are conducted under many names such as fear factor and there is a lot of response from many parts of the world which shows that people are interested in adventurous games. The response from the people towards such programs is quite surprising.

Secondly, games with a high risk factor yield man a lot of money. This is the second reason why people are attracted towards dangerous games. People who conduct such games are trying to cash the people’s interest towards such games and earn lot of money; as a result players of such games are highly paid. So peoples mind has changed towards earning money in a short span without caring the risk to be taken in the game. For example in many games such as rugby, boxing players are highly played. Recent studies prove the fact that the richest sports men are in mostly in dangerous games. So such games which are yielding them money made sponsors to attract people. There are many tricks played made by people who conduct such games and people fall in such traps.

More over in this present world there are only a few ways of attaining fame. Sports being one of them. Among many games such as soccer, wrestling etc. has got craze among the people. So people are attracted to join such games to be noticed in this world. For example many players are well known by their games they play such as Beckham and Rock. Such people now-a-days are proud about calling them as hero’s to sum up, awareness must be created among the people towards such games. It is a known fact that distance lends enhancement to view. So people should stop attracting towards such games for the sake of money, fame, etc, risking their lives.

Information from Advertisement

2009-10-30T01:09:00.000-07:00

Nowadays, a global village was opened. So many travelers are increase more and more. So most countries advertise their country. So many people get information from advertisement. Advertising can tell people a lot about a country. The method of advertising their countries are book and magazines. Also the most effective way is showing on TV, and post it at the billboard. These useful ways can show traveler or people a lot of information about country.

Books and magazines are one of the cleverest methods. These days many people like to read magazines when they have spare time. It has many pictures. They attract people's eyes. Also they can be remaining forever. People can save the book forever. So people read them many times. For example, there is a magazine in the hospital. It is for patient to read when they have time. So people can see that many time and know about that country. Using book to show country is a smart idea.

These days many people watch TV. TV gives people the feeling of movement and make eye better. Also TV program show the country more specifically. For example, in the documentary is one of the best methods. It attract people's sight and explain the country very specific. So many people can get information of country better than any other ways. It is nicer that advertise country on the documentary.

Billboard can make people's eyes attention. People can see it at once. Because it is very short. For example, there is some people who need to take a bus. While they waiting for bus they can read billboard. So people can know that country approximately. It is very economical. Much advertisement is very plentiful. So many advertisers use this method to tell their country.

Today, many want to know about other country for travel. So advertising is very important to give them lots of information, There are books and magazine to use forever and TV to attract people and give specific information. Also economic billboard make advertise country. So advertising can show foreigners and people lots about countries. People should advertise it by books, TV and billboard.

Investment in Environment Protection

2009-10-28T21:51:00.001-07:00

Nowadays, a large number of rich companies invest significant amounts of money in protecting the environment or supporting arts or fundamental scientific research. Both areas are important, of course: the ecological balance is even now seriously damaged due to industrial pollution, destruction of rain forests or the dreaded greenhouse effect; on the other hand, the society we live in is by no means sufficiently investing into its cultural development and this can eventually lead to a complete decadence and the obliteration of moral values which differentiate us humans from the animals. Both the environment and the human culture need support and it is incredibly hard to determine which is more important.

There are a number of actions which can be performed in order to reduce the already high amount of pollution on Earth. However, most of them require the development of new technologies which will allow needed industrial materials to be produced in an ecologically safe manner; for instance, one of the most important needs of our civilization, energy, can be produced in many ways, but not all of them are environmentally safe. While coal is relatively cheap to obtain, it produces significant waste; on the other hand solar or nuclear energy do not harm the environment directly, yet they are currently too expensive to exploit world-wide. Investing in research of new technologies would allow energy and other important resources to be produced in a nature-friendly way.

It is debatable whether the natural environment is more important than the stability of human society. Without harmony among people, wars are more likely to start and cause millions of deaths; the environment wouldn't be spared, too. The most fearsome weapon we know of, the famous H-bomb, is capable of destroying entire regions of the world, effectively resulting in a catastrophe both in the society and the natural harmony. Development of the arts - quality movies, music, and literature, for instance - is one of the most important factors of social peace. Adequate stimulation of a quality artistic expression, therefore, presents an important factor of a harmonic social life.

Future Markets as A Future Contracts

2009-10-27T22:01:00.000-07:00

What we know as the futures market of today came from some humble beginnings. Trading in futures originated in Japan during the 18th century and was primarily used for the trading of rice and silk. It wasn't until the 1850s that the U.S. started using futures markets to buy and sell commodities such as cotton, corn and wheat.

A future contract is a type of derivative instrument, or financial contract, in which two parties agree to transact a set of financial instruments or physical commodities for future delivery at a particular price. If you buy a futures contract, you are basically agreeing to buy something, for a set price, that a seller has not yet produced. But participating in the futures market does not necessarily mean that you will be responsible for receiving or delivering large inventories of physical commodities—remember, buyers and sellers in the futures market primarily enter into future contracts to hedge risk or speculate rather than exchange physical goods (which is the primary activity of the cash/spot market). That is why futures are used as financial instruments by not only producers and consumers but also speculators.

The consensus in the investment world is that the futures market is a major financial hub, providing an outlet for intense competition among buyers and sellers and, more importantly, providing a center to manage price risks. The futures market is extremely liquid, risky, and complex by nature, but it can be understood if we break down how it functions.

While futures are not for the risk-averse, they are useful for a wide range of people. In this tutorial, you'll learn how the futures market works, who uses futures and why, and which strategies will make you a successful trader on the futures market.

Today's futures market is a global marketplace for not only agricultural goods, but also currencies and financial instruments such as Treasury bonds and securities (securities futures). It's a diverse meeting place of farmers, exporters, importers, manufacturers, and speculators. Thanks to modern technology, commodities prices are seen throughout the world, so a Kansas farmer can match a bid from a buyer in Europe.

Forex for Technical Traders

2009-10-26T23:24:00.000-07:00

The strong trends that foreign currencies develop are a significant advantage for technical traders. Unlike stocks, currencies rarely spend much time in tight trading ranges and have the tendency to develop strong trends. Over 80 percent of volume is speculative in nature and, as a result, the market frequently overshoots and then corrects itself. A technically trained trader can easily identify new trends and breakouts, which provide multiple opportunities to enter and exit positions.

The backbone of the Forex market consists of a global network of dealers. They are mainly major commercial banks that communicate and trade with one another and with their clients through electronic networks and telephones. There are no organized exchanges to serves a central location to facilitate transactions the way the New York Stock Exchange serves the equity markets.

Gold Exchange in Forex Markets

2009-10-25T19:34:00.000-07:00

In 1967, a Chicago bank refused a college professor by the name of Milton Friedman a loan in pound sterling because he had intended to use the funds to short the British currency. Friedman, who had perceived sterling to be priced too high against the dollar, wanted to sell the currency, then later buy it back to repay the bank after the currency declined, thus pocketing a quick profit. The bank’s refusal to grant the loan was due to the Bretton Woods Agreement, established twenty years earlier, which fixed national currencies against the dollar, and set the dollar at a rate of $35 per ounce of gold.

The Bretton Woods Agreement, set up in 1944, aimed at installing international monetary stability by preventing money from fleeing across nations, and restricting speculation in the world currencies. Prior to the Agreement, the gold exchange standard--prevailing between 1876 and World War I--dominated the international economic system. Under the gold exchange, currencies gained a new phase of stability as they were backed by the price of gold. It abolished the age-old practice used by kings and rulers of arbitrarily debasing money and triggering inflation.

But the gold exchange standard didn’t lack faults. As an economy strengthened, it would import heavily from abroad until it ran down its gold reserves required to back its money; consequently, the money supply would shrink, interest rates rose and economic activity slowed to the extent of recession. Ultimately, prices of goods had hit bottom, appearing attractive to other nations, who would rush into buying sprees that injected the economy with gold until it increased its money supply, and drive down interest rates and recreate wealth into the economy. Such boom-bust patterns prevailed throughout the gold standard until the outbreak of World War I interrupted trade flows and the free movement of gold.

After the Wars, the Bretton Woods Agreement was founded, where participating countries agreed to try and maintain the value of their currency with a narrow margin against the dollar and a corresponding rate of gold as needed. Countries were prohibited from devaluing their currencies to their trade advantage and were only allowed to do so for devaluations of less than 10%. Into the 1950s, the ever-expanding volume of international trade led to massive movements of capital generated by post-war construction. That destabilized foreign exchange rates as setup in Bretton Woods.

The Agreement was finally abandoned in 1971, and the US dollar would no longer be convertible into gold. By 1973, currencies of major industrialized nations floated more freely, as they were controlled mainly by the forces of supply and demand. Prices were floated daily, with volumes, speed and price volatility all increasing throughout the 1970s, giving rise to new financial instruments, market deregulation and trade liberalization.

In the 1980s, cross-border capital movements accelerated with the advent of computers and technology, extending market continuum through Asian, European and American time zones. Transactions in foreign exchange rocketed from about $70 billion a day in the 1980s, to more than $1.5 trillion a day two decades later

Fundamental Information

2009-10-24T22:02:00.000-07:00

Fundamental information can be instrumental in forming market opinions and should be used as a tool in conjunction with Technical Analysis and Seasonal Studies to help formulate trading decisions. In futures trading, there always seems to be two trains of thought at work; Technical and Fundamental Analysis. Pure technicians rarely pay attention to fundamental news, since they believe prices have already discounted all that is currently known. We believe that it is prudent to know what fundamental factors are helping shape prices, and particularly what reports might affect our trading decisions.

The U.S. Government is one of the largest sources of fundamental information affecting commodity prices. For agricultural commodities, the United States Department of Agriculture (USDA) is responsible for the majority of reports. Every week, the USDA releases some type of estimate on the status of a commodity, supply and demand, available stocks or projected production. Many private services produce similar estimates which can impact commodity prices. Most of this information is available to you through the Internet, news wire services or our broker. A stated above, traders should get to know when these reports are released and it is our recommendation that we obtain a calendar indicating the same.

The US government also releases a wide array of financial reports each month. Many of these reports can and do influence financial future prices. Traders should be cognizant of the release dates. Some reports impact prices more than others, and as the economic picture changes, it is not uncommon for the importance of one report to take precedence over another. For example, when the Federal Reserve (FED) is active in monetary policy, the Federal Open Market Committee (FOMC) action on interest rates can be widely anticipated. When the Fed is inactive, FOMC meetings receive little attention from traders.

Fundamental Analysis

2009-10-23T21:26:00.000-07:00

We define Fundamental Analysis as the study of supply and demand factors affecting futures market prices. This is one of the principal theories for determining futures market pricing, and goes to the very root of futures trading. The study of supply and demand factors dates back as long as goods have been produced. Many of the same economic principals that helped determine commodity prices in the past hold true in today’s marketplace. The basic principals behind fundamental analysis are:

· A decrease in supply normally puts upward pressure on prices and an increase in supply puts downward pressure on prices.

· As demand increases for a particular commodity, higher prices can develop while lower prices often develop when demand diminishes.

· When using fundamental analysis in futures trading, it is important to have an idea of what factors are affecting both the supply and demand side of the equation. There are many different factors that affect each commodity differently.

There are also many overlapping principals that affect both supply and demand such as: currency exchange rates, interest rates, transportation rates, governmental policies, politics, tariffs, war and what’s “hot” according to public opinion. Much information is available today through the Internet, TV, radio, your brokerage firm and trade publications pertaining to what fundamental information might be affecting commodity prices. It is important not to focus on just one particular source of information, but rather to attempt to look at a broad spectrum of news services and sources. The key factor for many traders knows what information is really helping shape prices and what information is nonessential. Overall, the challenge of fundamental analysis is gathering discernible information quickly, and then acting upon it before prices have already moved.

Margins in Futures Market

2009-10-23T00:42:00.000-07:00

In the futures market, margin has a definition distinct from its definition in the stock market, where margin is the use of borrowed money to purchase securities. In the futures market, margin refers to the initial deposit of “good faith” made into an account in order to enter into a futures contract. This margin is referred to as good faith because it is this money that is used to debit any day-to-day losses.

When we open a futures contract, the futures exchange will state a minimum amount of money that we must deposit into your account. This original deposit of money is called the initial margin. When we contract is liquidated, we will be refunded the initial margin plus or minus any gains or losses that occur over the span of the futures contract. In other words, the amount in our margin account changes daily as the market fluctuates in relation to our futures contract. The minimum-level margin is determined by the futures exchange and is usually 5% to 10% of the futures contract. These predetermined initial margin amounts are continuously under review: at times of high market volatility, initial margin requirements can be raised.

The initial margin is the minimum amount required to enter into a new futures contract, but the maintenance margin is the lowest amount an account can reach before needing to be replenished. For example, if our margin account drops to a certain level because of a series of daily losses, brokers are required to make a margin call and request that we make an additional deposit into our account to bring the margin back up to the initial amount.

Forex Trading

2009-10-22T01:36:00.000-07:00

The 1971 abandonment of the Bretton Woods Accord and the subsequent unwinding of the system of fixed exchange rates gave rise to the foreign exchange market as we know it today. Forex refers to the foreign exchange market, where brokerage firms and banks are connected over an electronic network that allows them to convert the currencies of countries around the globe. The forex market is the largest and most liquid financial market in the world. The daily dollar volume of currencies traded in the currency market exceeds $1.9 trillion, many times larger than the combined volume of all U.S. equities and futures markets.

While forex trading used to be executed exclusively between government central banks and commercial and investment banks, trading forex has become increasingly accessible to private investors thanks to the PC and internet. The most commonly traded currencies are the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. The FX market runs 24-hour hours a day, 5 days a week with continuous access to global dealers. Trading is not centralized on a physical location or an exchange, as with the stock and futures markets. Foreign Exchange is the simultaneous buying of one currency and selling of another. Currencies are traded in pairs, for example Euro/US Dollar (EUR/USD) or US Dollar/Japanese Yen (USD/JPY).

For example, you would execute a trade when you expect the currency you are buying to increase relative to the one you are selling. If the currency you are buying increases in value, you must sell the other currency to close the position and take a profit. The first currency in the pair is called the base currency and the second is called the counter or quote currency. Usually the US currency is the base currency and quotes are given in $1 USD per counter currency, e.g. USD/JPY. The exceptions are the British Pound, the Euro and the Australian Dollar. Understanding forex quotes: 1 unit of the base curreny = the exchange rate in the quote currency. Eg if EUR/USD is trading at 1.2762, 1 Euro will buy you 1.2762 Dollars.

Understanding contract size in forex trading: The contract size is normally a lot of 100,000. This means per standard contract you are controling 100,000 units of each pair, so if you are buying eur/usd you would be buying 100,000 euro's and selling 100,000 dollars simultaneously. For this contract size, each pip (the smallest price increment) is worth $10. Many firms offer mini accounts now where you can trade units of 10,000, where the pip value is $1. Trading the Forex market allows very low margin requirements relative to other markets.

Movies and Foreign Trade

2009-10-21T08:43:00.000-07:00

Movies are favorites of majority of people around the world. Some of them bring pleasure to millions whereas others stir the audience hearts with their deep implications. People can enjoy movies in many different ways, but one thing could be concluded from those is their extensive influence on human society. More exactly, they yield tremendous impact on audience then determine their thought and behavior.

Every year, hundreds of movies are produced to serve people taste. Professional film producers because of their own aims the movies they produce have different impressive tendencies. Some movies are serious, designed to make the audience think. Other movies are designed primarily to amuse and entertain... Producers can focus their film on every sphere of life such as education, politics, art, sciences...etc and help audience live with the past, present and future.

Obviously, nothing is as powerful as movies. Those that can touch the soul and the heart and revive everything from the beginning of human beings history bring our soul from this state to another. Unlike amusing movies, which can only help people laughing and to forget the present, the movies force us to think are highly valued because of their practical meanings. There are many lessons can be learned from those movies. Religious and ethical issues or the environmental protection and peace-keeping awareness can be broadly propagated. Each person feels the film in his or her own way. However, it is sure that a live story is much better than the pure story in the book. Children can quickly learn lofty lessons through movies and follow the example more easily than those they learn from books and school.

To produce a valuable movie is not an easy work. But it should not be focused on making money. It requires a good script, excellent stage director, talent actors and actresses. Besides, the financial investment and time are also important factors. Nowadays, modern film producers usually aim to audience state to make films. Flourish film studios gradually appear affirm the wide and deep influence of movies on human life.

Determining the Trend

2009-10-19T07:33:00.000-07:00

The trend is the observable direction of the market -- up, down, or sideways -- and, by acting in concert with the market trend, we significantly increase our odds of success. The reason for this is that the trend of the market normally indicates the direction of most stocks and sectors. In fact, during a strong bull market over 90% of stocks can be trending upward together, which means our odds of picking a winning stock are nine out of ten. When we analyze the trend, there are three time frames we will address -- short-term (days to weeks), intermediate-term (weeks to months), or long-term (months to years). These are broad definitions and can be shifted down into shorter time frames as suits the individual (i.e. short-term could be hours to days), but it is important to always we need to be aware of the trend in three consecutive time frames because they are interrelated, and actions must consider all three.

The target time frame (where we will be looking to hold positions) is the intermediate-term (IT). To determine the kind of intermediate-term (IT) positions we can take, we first look at the long-term (LT) trend. (This concept was presented by Dr. Alexander Elder in his book, "Trading for a Living"; elder.com) If the LT trend is up, we can be IT long or neutral. If the LT trend is down, we can be IT short or neutral. (Being neutral, which is hedged or in cash, is always an option no matter what the trend.) Once the LT trend is identified, we wait until the IT trend is moving in the same direction as the LT trend before opening compatible positions, and we use information from the short-term trend to get optimum execution on new positions. The longer-term trend is the dominant and most important trend, but we must be attentive to the shorter-term trends because that is where long-term trend changes can first be detected. The longer-term trend determines our strategic stance, but the shorter-term is where we make our tactical moves.

Good Communication Skills

2009-10-18T03:12:00.000-07:00

Being successful in life requires more than one characteristic like honesty, communication, ambition, sense of humor etc. However, if we have to choose one characteristic then it would be the ability to communicate. Being able to communicate with people is advantageous in many ways.

First of all, communication skills are so important in work especially if we work as a team member. If we don’t have good communication with other team members then we are not able to develop good ideas. Even if we have some good ideas for instance then we are not able to propose them. Moreover, many jobs nowadays require very good communication skills especially if we are working as a representative to some company, an auditor or administration or management or technician, even a nurse. Success is yet not only considered in work life but also in personal life.

Family and friendship relationships require good communication. Having the ability to communicate with family and friends gives us more respect. Moreover the person wins the love of the people around him/her and therefore increases his/her chances of being happy life.

To sum it all, communication skills make it easier for a person to achieve both love and success in his/her personal and professional life. Therefore, easier and smoother relations. So having good communication skills is considered an important characteristic to be success Furthermore, even if a person manages to succeed in work without good communicative skills, that person will probably experience difficulties in their personal life. Success in life is not only limited to professional achievements. Family relationships and personal relationships are also important aspects of it.

Forex: Analyzing Securities

2009-10-17T03:35:00.000-07:00

When analyzing financial instruments, there are usually two schools of thought. The more traditional approach is to focus on a company's fundamentals. One can study the earnings growth potential, price/earnings ratio compared to peers, or more precisely, the company's annual report figures. All this attempts to assist the investor in forecasting the future price behavior of the company's stock. In broader markets such as foreign exchange rates and interest rates, it would be the economic performances of the country versus another, or where the country is at in terms of the economic cycle that would be focused upon.

Moreover, due to rapid proliferation of information technology, such type of information are not only readily available, but in fact so much so that the amount of information can overwhelm any individual's attempt to make a meaningful study without undue time delay because of the sheer volume of work involved, thus rendering the derived results often useless.

In the other spectrum, however, lies the development of collective investment schemes such as funds that employ asset managers and their specialized analysts, whose main focus is to concentrate their efforts in one or two selected industry sectors or companies. For any individual trying to compete with these analysts and be one step ahead, it would be extremely difficult.

Even assuming that we are sufficiently competent in our ability to analyze information, it still does not stop the likes of Enron to doctor their results and therefore finding genuine fundamental information is itself already a great hurdle to overcome.

Perhaps the most important aspect of all is the fact that all the study and work involved would only end in a decision to buy, hold or sell, effectively translating the work into the price behavior of the instrument. How much the market has discounted the information, how much expectation is build into the price, and how would sentiments change when a new set of figures come out are all things that can not be effectively studied based on the underlying fundamental data. Thus, this is where we can turn our attention to the second school of thought when analyzing financial instruments:

Technical Analysis

2009-10-15T03:09:00.000-07:00

The history of technical analysis stems from the Dow Theory which was developed in the early 1900s by Charles Dow. The main principles of the theory include: 1) price discounts all known information, 2) price movements follow trends and are not completely random, and 3) history repeats itself. A direct consequence of the Dow Theory is the widely followed Dow Jones Industrial Average. Technical analysis (TA) can be defined as the study of historical price movements in an effort to forecast future price movements with the primary tool for technicians, as they are often referred to as, being the price chart. Technical analysis is applicable to all securities such as stocks, futures, commodities, in dices, and currencies where the price is influenced by the forces of supply and demand.

Technical analysts believe that the current price fully reflects all available information. Because all information is already reflected in the price, it represents the fair value and should form the basis for analysis. Technicians believe that the markets may experience extended periods of random fluctuation whereby the price is unpredictable but most technicians would also agree that there exists shorter periods of non-random price movements that can be analyzed and forecasts can be derived. Technicians believe that it is possible to recognize a trending market, invest or trade based on the trend, and come out on top as the trend unfolds. Because technical analysis can be applied to many different time frames, as explained in the Chart Analysis section, it is possible to spot both short-term and long-term trends.

Technical analysis is useful to everyone -- not just the short-term trader or intermediate-term speculator, but to the long-term investor as well. Technical analysis will not predict the future, but it will help you assess the market environment so we can act in concert with the dominant context. To do this we use a simple process involving three essential analysis steps:

(1) Determine the market trend; (2) Evaluate the market condition; and (3) Identify and initiate actions that are most compatible with the trend and condition of the market.

Note that in the first two steps we acquire information to help us determine which actions to consider in step three. We let the market tell us what to do because we want the tide of the market working in our favor, not against us. For example, if the trend is up and the market is oversold, we would look for opportunities to go long. Or, if the trend is up but the market is overbought, we would become somewhat defensive, tightening stops in anticipation of a price correction. We don't decide what we are going to do until after we have determined what actions the market will best accommodate and support based upon the trend and internal condition.

Another important aspect of this process is that we are not trying to forecast what the market will do, rather we are directing our efforts toward analyzing and responding to what we can observe about current market conditions. We cannot see the future, but we can respond intelligently to the environment we can observe. In general, technical analysis is performed by comparing the current price action of a security with its historical price action to predict future movements. It follows then that this process can be defined as the fact that history repeats itself.

Technology

2009-10-13T20:48:00.000-07:00

Technology by definition refers to the improvement of the technical know how and advancement of machinery to improve the working systems in the human society. In a way this looks a very good idea in that mans' work would be made much faster and less laborious. Machines which are the main implements of technology have a major advantage to mans' ways of life. Take for example an aero plane, which being a product of advance in technology has made all corners of the earth look like they are only centimeters apart. It has made the means of communication which prior to its development was very difficult much easier and less risky. Traveling to many parts of the world which are very many miles apart now only takes a few hours or days where as this used to take days or even months.

On the other hand technology has created a number of new hazards to the health of societies. The machines make life easy but also expose people to new problems. In the example considered above transportation has become easier by planes but these planes also expose people to accidents which have become so numerous and clam many lives daily. As we all know that a majority of these machines use fuel and that to use the fuel it has to burn there are new products which we introduced into our environment. These new products include gases from automobiles which pollute the air we breathe. These gases expose us to lung diseases, cancers and number of new ailments which have not yet been fully explored.

These are several viewpoints on the implications of technological change and advancement and such schools of thought which considerably vary have their respective validity. Technological change has its advantages and disadvantages. For one, it is true that it partly solves problems and makes life better. At the same time, technological changes may likely create new problems thereby threatening or damaging quality of life. In the developing economies, for instance, technological advantages have both its merits and demerits. The introduction and seeming acceptability and usefulness of computers have somehow helped increase the efficiency of several firms. It is not only in the industrial sector that technological change proven to be very effective. In the agricultural sector, for example, the introduction of new technologies in increasing production has been very effective in expanding agricultural produce. These are just a few examples to illustrate the advantages of technological advancement.

On the other hand, countries should be more careful on their choice of technology since it must be noted that while certain types of technology are adaptable to developed economies the same type of technology may not fit the environment of developing countries due to differing economic, social, cultural, and political factors. For example, infrastructure improvements such as a construction of irrigation dam in the mountains of the Philippines where several natives reside may likely be resisted by the population due to cultural factors. They may prefer not to have such improvements in view of traditional values. Another example is the pollution impact of some technological improvements particularly in the industrial sectors. The choice and adaptability of new technology should therefore be carefully studied. The short, medium, and long term impact of such technology is very important particularly for developing economies. The benefits should always be greater than the costs.

Exchange Rate and the Marshall-Lerner Condition

2009-10-13T03:50:00.001-07:00

The Marshall Lerner Condition shows the conditions under which a change in the exchange rate of a country's currency leads to an improvement or worsening of a country's balance of payments. Under a floating exchange rate regime balance of payments disequilibrium should automatically be restored to equilibrium without the need for government policy. In the case of a fixed exchange rate, devaluation or a revaluation may be used to restore disequilibrium. However, this is based on certain key assumptions which, some economists argue, do not apply to certain LDCs. The assumptions concern the extent to which a change in import and export prices affects the quantity of imports and exports demanded.

The inflows and outflows of foreign currency recorded in a country's balance of payments account are dependent on these price changes. Crucially the price elasticity of demand will determine the impact of the price change on the quantity of exports demanded and the quantity of foreign exchange earned. If the exchange rate of a country decreases then the price of its exports will fall and the price of imports rises. Initially one might expect little to happen to the amount of exports and imports demanded as consumers take time to change their preference from imported goods to domestically produced goods. In addition, foreign consumers will take time to adjust from domestic goods to foreign exports. If this was the case the balance of payments might be expected to worsen as the value of exports would decrease and the value of imports would increase.

After a while the situation improves as the deficit gets smaller and then moves to surplus. In the longer time period once consumers' preferences have adjusted to the changes in imports and export prices then the amount of exports and imports will change. The amount by which they change will determine the effect on the balance of payments on current account. The extent of the change will depend upon the price elasticity of demand for imports and exports. If demand for exports is first assumed to be relatively price elastic then the fall in the price of exports caused by the fall in the exchange rate will lead to a proportionately greater increase in the quantity of exports demanded. This would improve the balance of payments. If demand for imports is also assumed to be relatively price elastic then the rise in the price of imports caused by the fall in the exchange rate will lead to a proportionately greater decrease in the quantity demanded of imports. This would also improve the balance of payments on current account.

If the Marshall Lerner Condition is not met and the sum of the price elasticity of demand for exports and imports is less than one, then a fall in the exchange rate will bring about a worsening of the balance of payments. The fall in the price of exports will lead to a proportionately smaller increase in the number of exports demanded and the rise in the price of imports will lead to a proportionately smaller reduction in the amount demanded. Both of these factors will contribute to a deterioration of the balance of payments. In assessing the likely impact of a policy that will lead to a fall in the value of the currency consideration must be given to the price elasticity of demand for both the exports and imports.

Forex : An International Trade

2009-10-08T09:25:00.000-07:00

Countries are often more stable than companies and it's easier to predict their overall economic direction. Currencies are traded in pairs, so if a trader buys one currency, he is simultaneously selling the other. As with a stock investment, it is better to invest in the currency of a country that is growing faster and is in a better economic condition. Currency prices reflect the balance of supply and demand for currencies. Two primary factors affecting supply and demand are interest rates and the overall strength of the economy. Economic indicators such as GDP, foreign investment, and the trade balance reflect the general health of an economy and are therefore responsible for the underlying shifts in supply and demand for that currency. There is a tremendous amount of data released at regular intervals, some of which is more important than others. Data related to interest rates and international trade should be most closely examined.

A trade in the Forex market involves selling or buying one currency against another. Thus, there is no correlation between the foreign currency market and the stock market. A bull market or a bear market for a currency is defined in terms of the outlook for its relative value against other currencies. If the outlook is positive, we have a bull market in which a trader profits by buying the currency against other currencies. Conversely, if the outlook is pessimistic, we have a bull market for other currencies and traders take profits by selling the currency against other currencies. In either case, there is always a good market trading opportunity for a trader. The backbone of the Forex market consists of a global network of dealers. They are mainly major commercial banks that communicate and trade with one another and with their clients through electronic networks and telephones. The Forex market is so vast and has so many participants that no single entity, not even a central bank, can control the market price for an extended period of time. Even interventions by mighty central banks are becoming increasingly ineffectual and short lived.

Arts and life

2009-10-04T06:49:00.000-07:00

The arts make our lives so wonderful and colorful. They give us happiness and enjoyment. No doubt, arts are very important to us. However, if making a compariation between the arts and the environment, the later is so vital to our existence. The human beings are now facing the serious results of a polluted environment. The sand storms attack a lot of places due to the desertification of a huge amount of green lands. Numbers of big cities must control the usage of drinking water because of the decreased water resources. The holes in the ozone layer cause a large increase of skin cancer cases. Some animals and plants are on the edge of extinction. Without them, the food-link will be broken. When our lives are endangered, how can we discuss the arts?

In addition, a good environment benefits not only us but also our descendents. If we live in an environment with polluted water, unfresh air and limited food, we will have a poor health. In the near future, our off springs might not have enough food to eat and water to drink. What a terrible situation it is?

Last but not least, a harmonious natural environment without pollution is the highest level of arts. In such an environment, birds are flying and singing in the blue sky; trees, grasses and flowers are dancing with gentle breezes; fishes are racing with the running water. It is the super arts that we dream forever.

We people have to put money in an action to improve our polluted environment. We are facing the challenge of existence. An improved environment will benefit both us and our descendents. Also a harmony in the environment presents the highest level of arts.

Environment and Human Society

2009-10-03T02:39:00.000-07:00

Television

2009-10-02T07:33:00.000-07:00

Television play more and more important role in people's daily life. No one can deny the fact that televisions are one of the most important inventions of the century. We get the news; watch the latest movies, cooking recipes etc. But, if we look from a wider perspective TV sets has really destroyed communication among friends and family because it's simply not used in a proper way. Recently, it is therefore there is a debate over the phenomenon that if the TV blocks the relation among friends and family. There is a main reason of the influence of the TV, time. During weekdays, coming back home from work, people should talk to each other, express their loves among them, listen to other's feeling. But, TV, attaching people, occupy these time. For example, parents do not want to play with their children, or listen what happened in the school. When turning off the TV set, people find it is time to sleep, no time left to communicate.

The same things also happen among friends. In weekend, people have spare time to traveling, shopping, holding a party, or even chatting through telephone. This will join a lot of friends together. However, TV as well as interferes these span. Another reason is people begin adapting this straight, uniformed, visual method of thinking. They abandon book thinking them selves, and copy the behavior showed on Television no matter good or bad. People become indifferent, shame, and sometimes violent learning from the Television. People do not know how to get long with each other. Although., TV open our eyes around the world, and decorate our life, the excess time washed on TV on judged program accepted has influenced or even spoiled our communication among friends and family.

First of all, children in their free time away form studies or weekends the first thing they intend to do is sitting in front of the TV and snacking. Even were the parents are around they gather together but, instead of talking together they sit watch the TV. Therefore, the communication between the parents and children is ruined.

Even if we consider the graduates or working class of people after a long work day they rather gather with friends to either watch a movie or go to a theatre. And it's not always the movies also soap operas, music channel which simply distracts them from social life. Although televisions are helpful in many other ways, but unfortunately it has shown its disadvantages rather than its advantages. There are many demerits for television sets beyond the communication problems. To conclude, it is in our hands to monitor our time sitting in front of televisions sets but dues to life style now TV has destroyed the communication among friends and family.

Life and Success

2009-09-30T22:30:00.000-07:00

Everyone wants to live a successful life. It is also true that no one likes failure. Everyone tries in order to achieve success, but only some achieve it. Success cannot happen without hard work because only hard working has something to do with success.

Success comes after trial and error. There is a maxim, "Failure is a mother of success." If someone succeeds without trial and error, someone will think that life is very easy, or success is nothing, which is not true.

Behind people who are succeeded in their field, there is a lot of hidden failure. They succeeded because they never gave up on anything; they keep doing hard work, and eventually, they achieve their goal. Only people, who know how bitter failure can be, can understand how sweet success is. The real success always comes after tasting bitterness of failure. Only lazy, weak, and coward people try to depend on luck; they will never taste the sweetness of success.

Success with luck is not real success; it cannot last long at the end. A lot of people envy some people whose parents have great fortune and fame. Those people might not have to worry about their future career because they will receive most of their parents' fortune. However, that is not a successful life. Most of people think that success means it comes with fame, money and pride. However, that is not full explained. The real meaning of success, in my opinion, is that person has to have passion for his/her career, possessing high self-esteem, healthy mind with satisfaction, and especially, always being loved or admired by society.

Key of Success of Life

2009-09-30T08:21:00.000-07:00

Success means attainment of aims or fame, wealth etc. Everyone has the different aim in the life. And wants to fulfill these aims. It makes him/herself successful in his/her life. Everyone has the different idea also to attain success. Some thinks that if they just leave everything at the God, he will help us, they will get the success. Others prefer to do hard work until they reach unto their goals.

Human has the most developed mind of all species. By using his brain he invent so many things, new innovations and this is the result of that hard work that we reach at this stage, where we have all the new technology and all the basic facilities of life .Even we reach unto the space to find the new life at the nearby stars . This all is just because of human intelligence and his patience and countless hard work. When we are children, our parents tell us to do hard work in our schools and take good grades, do hard work in sports and get success

Every one know today’s world is the competitive world. To survive in this competition world and become successful is a not an easy task. One has to a lot of hard work to reach unto his aim e.g. If we look, everywhere is the competition, in schools, in colleges, universities, at job places, in companies there is lot of competition and hard work. If a computer engineer work in a company, he needs to work hard to maintain his position in the company and for his per motion. Even the students need a limitless hard work to choose their major and go in specialized fields. Than to pass through interviews, to get jobs etc, everywhere is the competition and everything wants a lot of hard work.

Telephone and Communication

2009-09-29T08:07:00.000-07:00

Telephones and e-mail are among the most important inventions that make it easier to stay in touch. Whether they made communication between people more personal or not is questionable, but they have more personal than ever before. Telephones and e-mail are among the most important inventions that make it easier to stay in touch. Whether they made communication between people more personal or not is questionable, but they have more personal than ever before. There are dozens of reasons why telephone and email makes it easier for communications, such as their convenience, cost, speed etc. Though emails and telephones are the easiest way of communication in this busy and advance society they have made the relationship more impersonal .they do not bring up emotion as we do in eye to eye contact.

Besides telephones and email save time which is as good as gold in the eyes of today's hard working people who are living in big cities and trying to be on time instead of writing on a piece of paper, putting it into an envelope, stick a stamp on it and carry it to a post office, On the other hand we can communicate with our beloved ones in just seconds. So we can have more conversations with less time and effort making it much easier to communicate which is a necessity for having more personal communications.

We can not see the face to whom we want to communicate .we can simply make that person more happier by even saying the white lies, sharing something face to face is very personal in the sense that we can see the emotion in eyes. It further motivates one to express more .in emails or in telephone we hardly can sense the emotion with whom we are communicating. Moreover it also depends upon relationship we have to determine whether emails and telephones make communication less personal. Though it is also believed that some of the relations are affected by this way of electronic communication whereas some relations are made in heaven and they are not fluctuating simply by that kind of communication.

Before the existence people living in somehow distant locations were hardly able to communicate. Thus, they could not even have a contact with each other except hand written letters which reaches the receiver in weeks. With the help of telephone, although the two sides can not see each other, they can hear each other and exchange their ideas, problems and feelings. Being able to reach the person we want to reach strengthen our relationship allowing it to become more personal. Email enables sender to write long letters that can be sent in just a few seconds instead of weeks.

In conclusion, because of the reasons above and others that we can't even think of right now, telephones and email have become an important part of our lives and that's why the new forms of them are evolving everyday (like cell phones) making people much more closer than ever had before.

The Economic Effects of Devaluation

2009-09-27T09:24:00.000-07:00

A fall in the exchange rate of a country's currency can occur due to market forces, where changes in the demand for or supply of a foreign currency change the equilibrium price. In the case of a fixed exchange rate the government can intervene in the foreign exchange market and cause a fall or devaluation in the exchange rate. In either case, the impact of a fall in the value of a currency will be the same. As the value of a local currency such as the Kwacha depreciates, all Zambian exports become cheaper to overseas customers. The demand for the exports will increase. Export industries should see increases in their order books.

Conversely, the local prices of imports will increase causing domestic demand for these imported goods and services to fall. The conclusion might be drawn that the effect of cheaper exports and more expensive imports might improve the balance of payments situation. It is only possible to assess the impact on the balance of payments when the earnings from the exports and the spending on imports are considered. This will depend upon the price of the imports and exports AND the quantity of imports and exports bought and sold. Students of economics will see that the price elasticity of demand for exports and imports plays an important part here. It is thus necessary to explore the conditions when a fall in the exchange rate will improve the balance of payments situation. This is embodied in the Marshall Lerner Condition.

The Warehouse

2009-09-23T08:18:00.000-07:00

A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns. They come equipped with loading docks to load and unload trucks; or sometimes are loaded directly from railways, airports, or seaports. They also often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets.

Some warehouses are completely automated, with no workers working inside. The pallets and product are moved with a system of automated conveyors and automated storage and retrieval machines coordinated by programmable logic controllers and computers running logistics automation software. These systems are often installed in refrigerated warehouses where temperatures are kept very cold to keep the product from spoiling, and also where land is expensive, as automated storage systems can use vertical space efficiently. These high-bay storage areas are often more than 10 meters high, with some over 20 meters high.

The direction and tracking of materials in the warehouse is coordinated by the WMS, or Warehouse Management System, a database driven computer program. The WMS is used by logistics personnel to improve the efficiency of the warehouse by directing put aways and to maintain accurate inventory by recording warehouse transactions.

Traditional warehousing has been declining since the last decades of the 20th century with the gradual introduction of Just In Time (JIT) techniques designed to improve the return on investment of a business by reducing in-process inventory. The JIT system promotes the delivery of product directly from the factory to the retail merchant or from parts manufacturers directly to a large scale factory such as an automobile assembly plant, without the use of warehouses. However, with the gradual implementation of offshore outsourcing and off shoring in about the same time period, the distance between the manufacturer and the retailer (or the parts manufacturer and the industrial plant) grew considerably in many domains, necessitating at least one warehouse per country or per region in any typical supply chain for a given range of products.

Recent developments in marketing have also led to the development of warehouse-style retail stores with extremely high ceilings where decorative shelving is replaced by tall heavy duty industrial racks, with the items ready for sale being placed in the bottom parts of the racks and the crated or palletized and wrapped inventory items being usually placed in the top parts. In this way the same building is used both as a retail store and a warehouse.

Trading Strategy

2009-09-22T05:56:00.000-07:00

Most traders have such an ego investment in their trading that they cannot handle losses. Several losses in a row are devastating. This causes them to evaluate trading methods and systems based on very-short-term performance. Don't start trading a system based on only a few trades, and don't lose confidence in one after only a few losses. Evaluate performance based on many trades and multi-year results.

Taking losses day after day with a strategy that, just a short while ago was working well, can be a terrible experience. Trading performance can be consistently volatile with good and bad times highly magnified. The market can batter your psyche and gnaw at your soul. These bad experiences will never end as long as you trade. The more successful you are as a trader, the more money you will lose."

Keep trading in correct perspective and as part of a balanced life. Trading is emotionally intensive no matter whether you are doing well or going in the tank. It is easy to let the emotions of the moment lead you into strategic and tactical blunders. Don't become too elated during successful periods. One of the biggest mistakes traders make is to increase their trading after an especially successful period. This is the worst thing you can do because good periods are invariably followed by awful periods. If you increase your trading just before the awful periods, you will lose money twice as fast as you made it.

Knowing how to increase trading in a growing account is perhaps the most difficult problem for successful traders. Be cautious in adding to your trading. The best times to add are after losses or equity draw downs. Don't become too depressed during draw downs. Trading is a lot like golf. All golfers, regardless of their ability, have cycles of good play and poor play. When a golfer is playing well, he assumes he has found some secret in his swing and will never play poorly again. When he is hitting the ball sideways, he despairs that he will never come out of his slump.

Trading is much the same. When you are making money, you are thinking about how wonderful trading is and how to expand your trading to achieve immense wealth. When you are losing, you often think about giving up trading completely. With a little practice, you can control both emotional extremes. You'll probably never control them completely, but at least don't let elation and despair cause you to make unwarranted changes in your approach.

The Trade Markets

2009-09-21T06:08:00.000-07:00

It is important to select a good universe of markets that are appropriate for the account size, risk level and trading style. It also important that the market universe to be diversified. There are always a number of big market moves every year, but no one knows in advance where they will be. If you trade a diversified portfolio, there is a greater chance that you will catch some of the truly big moves that make for successful trading.

Another consideration in choosing a market to trade is its historical propensity to have more big trending moves. Since the trend is your edge in trading, you can maximize your edge by selecting the trendiest markets. The following are some of the best trending markets in various trading sectors. The currencies are the best trending sector. The currencies to trade are the Swiss Franc, the German Mark, the Japanese Yen and the British Pound.

Interest rate futures are also good trending markets. T-Bonds represent long-term interest rates and Eurodollars are for short-term interest rates.

• In the energy complex, Crude Oil, Heating Oil and Natural Gas are good trading vehicles.
• In the food sector, Coffee, Orange Juice and Sugar are recommended.
• In metals, you can trade Gold, Silver and Copper.
• In agricultures, Corn, Oats, Soybeans and Cotton are the best.

The key to success is to test whatever strategy you intend to apply before you trade with it. Remember that the conventional wisdom that you read in books is mostly ineffective. When applied consistently, most trading methods don't work. You can't test your plan unless it is specific. The rules must be precise and objective. Having a thoroughly tested plan is crucial to maintaining the confidence necessary to keep trading the plan through the inevitable losing periods that every good system and every good trader must endure. The reliability of non-computerized testing is highly suspect. Using computer software that tests a particular approach or a variety of approaches is preferred. You must learn the correct way to test and evaluate trading approaches.

Trade & Loss

2009-09-20T07:45:00.000-07:00

No one wants to exit a trade with a loss. They don't want to lose money. More importantly, they don't want to admit they were wrong. You can always think of many reasons to hold on to a losing trade. You can hope that the market will suddenly turn around and give you a profit instead of a loss.

This is another example where successful traders have learned to do the hard thing. If there is one thing consistent in the stories of how good traders turned themselves around from being bad traders, it is their attitude about losses. Professional traders accept that losses are part of the game. Since the markets are mostly random, the best trading methods will always have numerous losses. Professionals do not equate losses with being wrong.

It is precisely because correct trading methods invariably generate many losses that it is important to keep the individual losses small in relation to the overall size of the account. In order to keep trading, you must preserve your capital. If you can keep trading in the direction of the trend, the big profits will come. However, if you take too many large losses, your capital will be wiped out before you can enjoy the big profitable trades.

The laws of probability insure that regardless of your approach, you will inevitably suffer some long strings of consecutive losses. If you are risking too high a percentage of your account on each trade, before long one of these unavoidable losing streaks will blow you away. Keeping losses to about one percent of your account size is optimal. With smaller accounts, the percentage will have to be larger. Five percent on one trade is probably the highest prudent level of risk.

Because of the randomness in commodity price action, you must allow the market a certain amount of leeway before giving up on a trade. In general, you must be willing to risk between $500 and $1,000 to trade most markets. For smaller accounts, the Mid America Exchange offers trading with smaller sized contracts that allow you to trade with lower risk.

While there are more sophisticated ways to decide when to exit a losing trade, getting out after a loss of a predetermined dollar amount is as good a way as any. The important thing is to respect your plan. You can place a stop-loss order with your broker that instructs him in advance to exit a trade if the market hits your loss limit. You should always do this to guard against inattention or changing your mind at the crucial moment.

History of Commodities Exchanges

2009-09-19T06:40:00.000-07:00

The futures markets were developed initially to help agricultural producers and consumers manage the price risks they faced harvesting, marketing and processing food crops each year. The modern futures industry still serves those markets. The world’s oldest established futures exchange, the Chicago Board of Trade, was founded in 1848 by 82 Chicago merchants. The first of what were then called “to arrive” contracts were flour, timothy seed and hay, which came into use in 1849. “Forward” contracts on corn came into use in 1851 and gained popularity among merchants and food processors.

Meanwhile, what is now the nation’s largest futures exchange, the Chicago Mercantile Exchange, was founded as the Chicago Butter and Egg Board in 1898. At that time, trading was offered in—you guessed it—butter and eggs. Other prominent U.S. commodities exchanges were formed before or just after the turn of the century, and also had their roots in agriculture. At one time, you could trade on the National Metal Exchange, the Rubber Exchange of New York, the National Raw Silk Exchange, and the New York Hide Exchange. Small exchanges like these ultimately merged to become the exchanges we have today.

The most popular physical commodities contracts can be broken down into several broad categories: metals, energy, grains, livestock, and food and fiber. There are some modern additions to commodity futures that are unique, such as chemicals and fertilizer futures, but the most popular contracts fit under the broad categories listed here and are mainly subject to price fluctuations based on supply and demand factors in consuming and producing countries.

Participation in Commodities Markets

2009-09-18T06:01:00.000-07:00

There are two basic types of participants in the commodities markets—hedgers and speculators. The hedgers are those seeking to minimize and manage price risk, while speculators are those willing to take on risk in the hope of making a profit. As an example of a hedger, you might be a large corn farmer wanting to sell your product at the highest possible price. However, unpredictable weather may create risk, as well as excess supply that could drive prices down. You could take a short position in corn futures, and if prices fall, you could then buy back the futures at a lower price than you previously had sold them. This would help you offset the loss from your cash crop and help minimize your risk. Of course, if prices rose, you’d lose money on the futures transaction, but the idea is to use futures as a hedge.

The speculator could take the opposite side of this futures transaction. That participant would bear the risk that prices are going to rise in hopes of generating a profit on the long futures position. Most likely, this type of speculator has no actual stake in the business, other than buying and selling in the futures market. A commercial food producer in need of the raw product (a breakfast cereal processor, for example) may also take the other side of the short hedger’s trade to offset the risk of paying higher prices for the commodity. If the price of corn rises, the commercial food producer could still capture a profit from the futures position, even though he’d be paying more for the actual corn.

An individual trader who commits his or her own capital to act as speculator on a particular exchange is known as a local. Typically, these individuals provide market liquidity by constantly buying and selling throughout the trading session and are viewed as important participants in the market by shouldering risk. While the term local has been used to designate those trading in the open-outcry markets, this era of electronic trading is making the phrase a little obsolete. However, their function as liquidity providers is equally important in electronic markets. The Commodity Futures Trading Commission defines this new breed of electronic traders “E-locals,” but they are often more simply known as independent traders.

Money and Stock Market

2009-09-16T17:13:00.000-07:00

The strike price, or exercise price, of an option determines whether that contract is in-the- money, at-the-money, or out-of-the-money. If the strike price of a call option is less than the current market price of the underlying security, the call is said to be in-the-money because the holder of this call has the right to buy the stock at a price which is less than the price he would have to pay to buy the stock in the stock market. Likewise, if a put option has a strike price that is greater than the current market price of the underlying security, it is also said to be in-the-money because the holder of this put has the right to sell the stock at a price which is greater than the price he would receive selling the stock in the stock market. The converse of in-the-money is, not surprisingly, out-of-the-money. If the strike price equals the current market price, the option is said to be at-the-money.

The amount by which an option, call or put, is in-the-money at any given moment is called its intrinsic value. Thus, by definition, an at-the-money or out-of-the-money option has no intrinsic value; the time value is the total option premium. This does not mean, however, these options can be obtained at no cost. Any amount by which an option's total premium exceeds intrinsic value is called the time value portion of the premium. It is the time value portion of an option's premium that is affected by fluctuations in volatility, interest rates, dividend amounts, and the passage of time. There are other factors that give options value and therefore affect the premium at which they are traded. Together, all of these factors determine time value.

Value of Option in Exchange Markets

2009-09-16T02:15:00.000-07:00

What a particular options contract is worth to a buyer or seller is measured by how likely it is to meet their expectations. In the language of options, that's determined by whether or not the option is, or is likely to be, in-the-money or out-of-the-money at expiration. A call option is in-the-money if the current market value of the underlying stock is above the exercise price of the option, and out-of-the-money if the stock is below the exercise price. A put option is in-the-money if the current market value of the underlying stock is below the exercise price and out-of-the-money if it is above it. If an option is not in-the-money at expiration, the option is assumed to be worthless. An option's premium has two parts: an intrinsic value and a time value. Intrinsic value is the amount by which the option is in-the-money. Time value is the difference between whatever the intrinsic value is and what the premium is. The longer the amount of time for market conditions to work to your benefit, the greater the time value.

Several factors, including supply and demand in the market where the option is traded, affect the price of an option, as is the case with an individual stock. What's happening in the overall investment markets and the economy at large are two of the broad influences. The identity of the underlying instrument, how it traditionally behaves, and what it is doing at the moment are more specific ones. Its volatility is also an important factor, as investors attempt to gauge how likely it is that an option will move in-the-money.

Options can provide leverage. This means an option buyer can pay a relatively small premium for market exposure in relation to the contract value (usually 100 shares of the underlying stock). An investor can see large percentage gains from comparatively small, favorable percentage moves in the underlying index. Leverage also has downside implications. If the underlying stock price does not rise or fall as anticipated during the lifetime of the option, leverage can magnify the investment's percentage loss. Options offer their owners a predetermined, set risk. However, if the owner's options expire with no value, this loss can be the entire amount of the premium paid for the option. An uncovered option writer, on the other hand, may face unlimited risk.

Option in Exchange Trade

2009-09-15T05:20:00.000-07:00

An option is a contract to buy or sell a specific financial product officially known as the option's underlying instrument or underlying interest. For equity options, the underlying instrument is a stock, exchange-traded fund (ETF), or similar product. The contract itself is very precise. It establishes a specific price, called the strike price, at which the contract may be exercised, or acted on. And it has an expiration date. When an option expires, it no longer has value and no longer exists. Options come in two varieties, calls and puts, and you can buy or sell either type. You make those choices - whether to buy or sell and whether to choose a call or a put - based on what you want to achieve as an options investor.

If you buy a call, you have the right to buy the underlying instrument at the strike price on or before the expiration date. If you buy a put, you have the right to sell the underlying instrument on or before expiration. In either case, as the option holder, you also have the right to sell the option to another buyer during its term or to let it expire worthless. The situation is different if you write, or sell, an option, since selling obligates you to fulfill your side of the contract if the holder wishes to exercise. If you sell a call, you're obligated to sell the underlying interest at the strike price, if you're assigned. If you sell a put, you're obligated to buy the underlying interest, if assigned. As a writer, you have no control over whether or not a contract is exercised, and you need to recognize that exercise is always possible at any time until the expiration date. But just as the buyer can sell an option back into the market rather than exercising it, as a writer you can purchase an offsetting contract and end your obligation to meet the terms of the contract.

When you buy an option, the purchase price is called the premium. If you sell, the premium is the amount you receive. The premium isn't fixed and changes constantly - so the premium you pay today is likely to be higher or lower than the premium yesterday or tomorrow. What those changing prices reflect is the give and take between what buyers are willing to pay and what sellers are willing to accept for the option. The point at which there's agreement becomes the price for that transaction, and then the process begins again. If you buy options, you start out with what's known as a net debit. That means you've spent money you might never recover if you don't sell your option at a profit or exercise it. And if you do make money on a transaction, you must subtract the cost of the premium from any income you realize to find your net profit. As a seller, on the other hand, you begin with a net credit because you collect the premium. If the option is never exercised, you keep the money. If the option is exercised, you still get to keep the premium, but are obligated to buy or sell the underlying stock if you're assigned.

Futures Trades

2009-09-14T02:23:00.000-07:00

Futures trades take place at any of a number of centralized exchanges, often in open-outcry, auction-style trading pits, but electronic trade-matching platforms (such as the Chicago Mercantile Exchange's Globex system, for example), are growing in importance every year. In every transaction, the exchange clearinghouse is substituted as the buyer to the seller and the seller to the buyer, thereby guaranteeing performance and eliminating counterparty risk. Customers who trade futures are required to post margin deposits with an exchange member firm which, in turn, must deposit margin with the exchange. Margins are not payment against the market value of the commodity represented by the futures contract, but rather, are a performance bond -- a good-faith deposit -- to ensure the ability of market participants to honor their financial commitments and cover any obligations which might arise out of their trading activities.

Buying a futures contract is called taking a "long" position. Selling a futures contract is referred to as taking a "short" position. A long futures position profits when the futures price goes up, and a short futures position profits when the futures price goes down. Maturing futures contracts expire on specific dates, usually during the contract month. At any time before the contract matures, the trader may offset, or close out, his or her obligation by selling what was previously bought or buying what was previously sold. By offsetting an open futures contract, a trader is relieved of any obligation to make or take delivery of the underlying commodity or financial instrument. This is made possible by the fact that futures contracts have standardized terms and trade on centralized exchanges. The vast majority of futures contracts, in fact, are closed out by offsetting market transactions prior to their maturity, rather than through the delivery process.

Market Surveillance: The Bank of Jamaica

2009-09-12T19:58:00.000-07:00

The Bank of Jamaica relies heavily on its system of market surveillance to decide whether, when, and at what rate to intervene. This system operates at two levels. Firstly, a formal reporting system exists that provides information daily on all foreign exchange contracts negotiated, indicating amounts purchased and sold with the respective buying and selling rates. Secondly, the Bank of Jamaica traders interact with market participants constantly throughout the trading day to gather information on routine as well as unusual developments that are occurring in the foreign exchange market.

The Bank of Jamaica is responsible for the collection of data on foreign exchange market activities. Data on each day’s trading activities are collated by the institution, summarized and disseminated to the public. Information is collected on the amount of foreign exchange that is purchased and sold in the system with the respective weighted average buying rate and selling rate. Data are also provided on the highest and lowest rates at which foreign exchange is purchased and sold as well as the 10-day moving average rate for purchases and sales of foreign exchange. This information is provided for the three main currencies, namely the United States dollar, the Great Britain Pound and the Canadian dollar. The exercise is done on a daily basis for the combined group of authorized foreign exchange dealers and cam bios, inclusive of transactions among themselves.

The Bank of Jamaica n November 2000, the Bank of Jamaica implemented ‘eGate’, an acronym for electronic Gateway for Auctions, Trade and Foreign Exchange Management in November 2000. Since this new electronic system allows for real time reporting of foreign exchange transactions, the data on daily foreign exchange training activities are available in a timelier manner. The dissemination of information on the ‘exchange rate for the day’, as the weighted average selling rate is called, is important as it is the applicable rate for customs duties, tax computations as well as for other accounting purposes.

The Bank of Jamaica further fosters relative price stability by way of foreign exchange market intervention. The Bank’s periodic purchases and sales of foreign currency prevent erratic fluctuations in the value of the Jamaica dollar. The Central Bank is also responsible for the dissemination of information on daily foreign exchange trading activities. In recognition of the positive impact that increased access to information can have on market efficiency, the aim of the Bank is to further develop the reporting system so that individuals and companies may have access to additional data on trading activities.