Sunday, August 23, 2020
Honesty Lost by Nathaniel Hawthorne My Kinsman, Major Molineux and Young Goodman Brown present Nathaniel HawthorneÃ¢â¬â¢s confidence in the comprehensiveness of wrongdoing. These works give various viewpoints into the idea of the human condition and the individualÃ¢â¬â¢s job inside it. Hawthorne fictionalizes an existence where fellowship with man is basic for otherworldly fulfillment. The primary characters of these accounts face moral issues through their quest for human fellowship. Regardless of whether the issues are good, mental, or both, Hawthorne demands that the individual must come to certify a bind with the parade of life, must come to accomplish some feeling of fraternity of man. So as to collective with humankind, one needs to surrender a safe, requested and honest world. The individual gets at risk to a fearsome exhibit of complex feelings. One feels estranged by a network that compels himself to debasement while his detachment makes an uncertainty. The recently started into the rituals of man shows up not any more good than the individuals who he hates. Hawthorne presents an existence where fellowship with humankind prompts defilement while confinement from people is an unforgivable sin. Nathaniel Hawthorne presents an intriguing issue with regards to man's quest for fellowship with his individual man. Transitioning in Hawthorne's time requires an insistence of transgression, fellowship with miscreants and festivity of life through wrongdoing. Hawthorne makes this condition by establishing the outcomes on earth. To feel the general pulse of fellowship, one must perceive sin, take part in and praise it. Hawthorne attests, perceives and delights in the debasement of the human condition. The main lethal advance of understanding human instinct is an unsure examining that closes in disarray. The narrative of My Kinsmen, Major Molineux presents the energetic character of Robin on his way from the nation to the town of Boston. He wishes to prevail inside the network, and figures that it won't be troublesome in light of his association through Major Molineux, an unmistakable figure of the network. Hawthorne disintegrates honesty gradually through the brutal experience of urban real factors. RobinÃ¢â¬â¢s introductory contact with the inhabitants of this network shakes his certainty. He doesn't yet comprehend the brutality of grown-ups and cheerfully proceeds on his way. However, Hawthorne underscores the expense of his longing. Robin has t... ... afterward. Camus demands Sisyphus is glad or there is no euphoria or recovery for life on earth. The significance of Hawthorne is evident in his thoughts of the human condition. Nathaniel Hawthorne finishes up his revelation of wrongdoing in the human condition at the purpose of widespread intrigue. The key for HawthorneÃ¢â¬â¢s comprehension of the human condition is the acknowledgment of the comprehensiveness of wrongdoing. So take this work for its blemishes, rather than tormenting these thoughts with the brutal meter stick of irresolute norms. Nathaniel Hawthorne accepts that understanding man is understanding its ethical state of defect. Works Cited: Hawthorne, Nathaniel. Ã¢â¬Å"Ethan BrandÃ¢â¬ . Nathaniel HawthorneÃ¢â¬â¢s Tales. Ed. James McIntosh. Norton Critical Edition. New York: Norton, 1987. 231-244. Hawthorne, Nathaniel. Ã¢â¬Å"My Kinsman, Major MolineuxÃ¢â¬ . Norton Anthology of American Literature. New York: W.W. Norton and Company, 1994. 1173-1186. Hawthorne, Nathaniel. Ã¢â¬Å"Young Goodman BrownÃ¢â¬ . Norton Anthology of American Literature. New York: W.W. Norton and Company, 1994. 1198-1207. Stubbs, John C. The Pursuit of Form: an investigation of Hawthorne and the sentiment. Chicago: University of Illinois Press, 1970.
Friday, August 21, 2020
Item Life Cycle Essay Global PRODUCT LIFE CYCLE The global item life cycle is a hypothetical model depicting how an industry develops after some time and across national fringes. This hypothesis additionally graphs the improvement of a companyÃ¢â¬â¢s advertising program while contending on both residential and remote fronts. Worldwide item life cycle ideas consolidate monetary standards, for example, advertise improvement and economies of scale, with item life cycle promoting and other standard plans of action. The four essential components of the universal item life cycle hypothesis are: the structure of the interest for the item, fabricating, global rivalry and advertising technique, and the showcasing system of the organization that designed or improved the item. These components are ordered relying upon the productÃ¢â¬â¢s stage in the customary item life cycle. Presentation, development, development, and decay are the phases of the fundamental item life cycle. During the presentation stage, the item is new and not totally comprehended by most customers. Clients that do comprehend the item might be happy to follow through on a greater expense for a bleeding edge great or administration. Creation is subject to talented workers delivering in short runs with quickly changing assembling strategies. The pioneer showcases generally locally, every so often spreading out to offer the item to customers in other created nations. Universal rivalry is typically nonexistent during the presentation stage, however during the development stage rivals in created markets start to duplicate the item and sell locally. These contenders may likewise fan out and start sending out, frequently beginning with the region that at first developed the item. The development stage is additionally set apart by a rising item standard dependent on large scale manufacturing. Cost wars regularly start as the pioneer breaks into an expanding measure of created nations, acquainting the item with new and undiscovered markets. Sooner or later, the item enters the development phase of the universal item life cycle and even the worldwide commercial center gets immersed, implying that nearly everybody who might purchase the item has gotten it, either from the improving organization or one of its rivals. Organizations seek the rest of the customers through brought down costs and propelled item includes. Creation is steady, with an attention on cost-cutting assembling strategies, so brought down costs might be given to esteem cognizant buyers. Item pioneers must watch both foreignÃ¢ and household markets from worldwide rivalry, while at long last breaking into less secure creating markets looking for new clients. At the point when the item arrives at the decrease stage, the pioneers may move creation into these creating nations with an end goal to support deals and minimize expenses. During decay, the item may get out of date in most created nations, or the cost is driven so low that the market turns out to be near 100% immersed.
Thursday, July 9, 2020
Expensive College Tuition Costs July 4 Columbia University is the single most expensive Ivy League college to attend (photo credit: Andrew Chen). Katie Lobosco of CNN Money reports that the single most expensive college to attend in America based on tuition and fees alone (not including room and board) isLandmark College. Its a small, private school in the state of Vermont that specializes in teaching students with learning disabilities. But most of our readers arent all that familiar with this particular college. However, they are familiar with the second most expensive college in America. And that school isColumbia University, which charged $49,138 for tuition and fees alone for 2013. This is based on data released by the Department of Education on July 1st, as reported by CNN Money. And which school is next down the list? That would be Sarah Lawrence College, with an annual tuition (plus fees) of $48,696. Next comes Vassar College at $47,890 followed in sequence by Carnegie Mellon University at $47,642, University of Chicago at $47,514, Trinity College at $47,510, George Washington University at $47,343, Wesleyan University at $47,244, and Tulane University at $46,930. Our readers will note that there are a couple of schools located in New York City near the top of the tuition charts. Its expensive to offer an education in the Big Apple so it should be no surprise that schools located within the five boroughs of New York City tend to appear on a ranking of expensive colleges. Is there a college you thought would make the list but didnt? Which school? Were curious for your thoughts on these universities with hefty sticker prices so write in by posting a Comment below. We look forward to hearing from you.
Tuesday, May 19, 2020
On November 22, 1963 the lives of John F. Kennedy, Harvey Lee Oswald, Jack Ruby, Jacqueline Kennedy-Onassis, Lyndon B. Johnson. John Connally, Abraham Zupruder, and several others , all took a dramatic turning point. On November 22, 1963 President John Fittzgerald Kennedy was assassinated in the Dealey Plaza of Dallas Texas. Less than two hours later CBS News showed Harvey Lee Oswald in handcuffs at Dallas Police Headquarters. Harvey Lee Oswald was born October 18, 1939 in New Orleans, Louisiana. At just 17 years old he joined the U.S Marines until discharged 3 years later. Fleeing to the Soviet Union and unsuccessfully becoming citizen, he returned to the United States in 1962 with a Russian Wife and infant daughter. He traveled place to place until landing a job at the Texas Depository Building in Dallas, Texas in October of 1963. At the time of KennedyÃ¢â¬â¢s motorcade through Dallas, Oswald was allegedly seen on the sixth floor of the Book Depository holding a rifle. Three shots were fired from that angle, at 12:30pm. The first shot wounding Texas Governor John B. Connally, and the next couple of shots fatally wounding President Kennedy. Kennedy was pronounced dead at Parkland Memorial Hospital around 1:00pm at age forty-six. Vice President Lyndon Johnson was sworn in as the 36th president of the United States at 2:39 pm. He was uninjured during the motorcade due to being a good three car distance behind President KennedyÃ¢â¬â¢s Lincoln convertible. His inauguration was locatedShow MoreRelatedThe Legacy Of John F. Kennedy1176 Words Ã |Ã 5 PagesJohn F. Kennedy did a lot for our country although his presidential term was cut short. He had a certain allure to him that Americans liked. Kennedy knew what to do to gain the votes of all different types of voters no matter their age, race, or religion. His campaign and presidency have inspired even todayÃ¢â¬â¢s presidents and presidential candidates in multiple ways. John F. Kennedy was a spectacular man and president that brought a fresh feel to America and who left a legacy that will never be forgottenRead MoreThe Legacy of John F. Kennedy1129 Words Ã |Ã 5 PagesPresidents relate in life and none in death. Most people know John F. Kennedy as the 35th President of the United States, the youngest president, and one of fewest presidents that was killed. But what was JFKs legacy? JFK was born on May, 29th, 1917 in Brookline, Massachusetts, a quiet, clam suburb in Boston. As a child John F. Kennedy was mostly referred to the name Jack, by friends and family. His parents, Rose and Joseph Kennedy were too involved with social rank and their place in BostonsRead MoreThe Legacy of John F. Kennedy1917 Words Ã |Ã 8 PagesWhat is a legacy? Is it strictly a visible, touchable object? A legacy is not just an object that people can see; it can be a dream or an idea. Although his life came to a tragic end, John F. Kennedy was one of the many presidents that served his term of presidency with compassion and dedication, and also, he left behind an unforgettable legacy to live on for the generations to come. His legacy was both an idea and dream that still affects many Americans today, as he led people to believe that heRead MoreThe Legacy Of John F. Kennedy1085 Words Ã |Ã 5 PagesJohn Fitzgerald Kennedy made history as AmericaÃ¢â¬â¢s youngest and first Catholic President. JFK, or Ã¢â¬Å"JackÃ¢â¬ Kennedy, was born into a wealthy family, who were considered American royalty. Jack Kennedy was only our President for a few short years, but the stories of his assassination and his legacy live on today. President Kennedy was easily one of AmericaÃ¢â¬â¢s most famous leaders of all time. John F. Kennedy was born in Brookline, Massachusetts, on May 29, 1917. Jack was the second of nine children bornRead MoreThe Legacy Of John F Kennedy1142 Words Ã |Ã 5 PagesThe Democrat that stood with his hand on the living holy scripture would not only be known as the youngest man to enter the sacred halls of the White House, but also as the one that entrusted his heart and soul for the love of his nation. John Fitzgerald Kennedy recited what seemed like ancient words bound within the inaugural speech with more than a noticeable Boston pronunciation. The unforeseen knowledge that this young senator would be the victim of a deadly attack left the world innocent. ThisRead MoreThe Legacy Of John F. Kennedy980 Words Ã |Ã 4 PagesBorn in 1917, John F. Kennedy grew up in a wealthy family with influence both politically, and economically. His grandfather was a famous politician, his father a billionaire, and his brothers he grew up with would go on to become well known politicians . Growing up in a family like this, it would appear hard to distinguish yourself, however, JFK would go on to surpass them all by becoming the 35th, and perhaps most beloved president of the United States. As president JFK was popular. He was youngRead MoreThe Legacy Of John F. Kennedy1879 Words Ã |Ã 8 PagesUnited State of America which was John F. Kennedy has been assassinated. LyndonÃ¢â¬â¢s purpose of the speech was comfort America after the death of John F. Kennedy and also to insure America that with this horrific tragedy that America has to go through he will continue the act of the forward thrust of America that John F. Kennedy had begun to do while he was in was the President. Also Johnson ensures America that John F. Kennedy will live on with us. John Fitzgerald Kennedy was the youngest president heRead MoreThe Legacy Of John F. Kennedy1480 Words Ã |Ã 6 Pagesvice president had given him prominence and experience where communism was concerned.. Democrats, meanwhile, nominated the relatively unknown John F. Kennedy, a young but accomplished senator from Massachusetts who had served with distinction in World War II and had won a Pulitzer Prize for his 1956 book Profiles in Courage .At only forty-three years old, Kennedy exuded a youthful confidence that contrasted sharply with NixonÃ¢â¬â¢s serious demeanorÃ¢â¬âa contrast that was plainly evident in the first-ever liveRead MoreLeadership And Legacy Of John F. Kennedy1388 Words Ã |Ã 6 PagesJohn F. Kennedy His Leadership Legacy John F. Kennedy was born on May 29, 1917 in Brookline, Massachusetts and was known as (Jack). He was the son of Joseph P. Kennedy, an ambassador to Great Britain during Franklin D. Roosevelt administration. The KennedyÃ¢â¬â¢s were one of the wealth family in American. He was one of the most important leader in America. When he graduated from Harvard University in 1940 he wrote a winning note with his publication of Ã¢â¬Å"Why England SleptÃ¢â¬ , it was an expansionRead MoreThe Legacy of John F. Kennedy Essay2477 Words Ã |Ã 10 PagesOur Fellow American The late president John Fitzgerald Kennedy once said, Ã¢â¬Å"Sure its a big job; but I dont know anyone who can do it better than I canÃ¢â¬ (Ã¢â¬Å"John F. KennedyÃ¢â¬ BrainyQuote.com). Kennedy was a young and fresh political figure at the time of his election in 1960. The thirty-fifth president of the United States was born May 29, 1917, in Brookline, Massachusetts. He was the youngest president ever, as well as the first and only Roman Catholic president (Bass, et al.). His presidency was
at May 19, 2020
Wednesday, May 6, 2020
Rainforests of the Atsinanana, Madagascar Christy Haakenson SCI230 Introduction to Life Science Paula Roberts March 27, 2011 The Rainforests of the Atsinanana is a place like no other. The continent of Madagascar can be found 200 miles off the east coast of Africa and completed full separation from all other land masses more than 60 million years ago (Staff W., 2001). The island of Madagascar has lived in isolation and with isolation gives the Rainforests of Atsinanana an abundance of plants and animals found nowhere else in the world. This unique place is made up of six national parks and was approved by UNESCO committee in New Zealand (WWF, n.d.). The Rainforests of Atsinanana is currently on the list of world heritage sites inÃ¢â¬ ¦show more contentÃ¢â¬ ¦One type of lemur is nocturnal and is only active in the night and the other type is diurnal and spends the days eating, mating, and playing (2005). Some are large in size like the indri, and others such as the BertheÃ¢â¬â¢s mouse lemur is the smallest in the world (2005). Although these creatures are different in characteristics, they have one sim ilarity and that is there home in Madagascar. Aside from many types of lemurs, there are many other unique creatures found in the Rainforests of the Atsinanana in Madagascar. Other species include the Flying fox bats, Fossa, Fanaloka, Tenrece, spear-nosed snake, and more than 3,000 endemic butterflies (Ward M, 2008). The isolation of this island and history has made primate extinction real. At this time there are at least 15 species of lemur that have gone extinct (2005). The main cause of these primates going extinct is because of the habitat loss from deforestation only leaving 8.5% of the original forests. The Rainforests of the Atsinanana Madagascar is not only unique for many types of species it is home to, but also for the unique plant life. Atsinanana has more than 12,000 plant species known in Madagascar, which are also endemic. Six of eight baobab trees that are endemic to Madagascar. Baobabs are bottle-shaped trees with large bases and branches that make a flat appearance to the top. The different types of baobab trees include
Question: Has United States win the war on terror Discuss? Answer: Terrorism has been a critical issue in the current social environment. There have been several terrorist activities noticed all across the world, but that did not raise an alarm among the major activist countries before 9/11 attack. The terrorist attack of 9/11 on the World Trade Centre in the United States of America changed the view of World Terrorism. The active mission against terrorism began in the year 2001 that divided the entire world into two groups known as terrorist group and peacekeeping force (Schmid, 2016). The USA started the war against terrorism in the name of Peace Keeping Force and won several battles against the Al-Qaeda and several other terrorist groups. It can be said that the United States of America has won few battles, but the war against terrorism is still yet of its height to save the entire globe from the verge of brutal killing and sacrifice of life in the name of terror. The paper has been developed to observe the current situation of terrorism all across the world and study how the American Army has succeeded in winning many battles. The primary aim of the paper is to judge whether these mere actions have led the Americans to win the war against terrorism. To answer the primary purpose of the paper, first of all, we must know what has been the result of the USAs war against terrorism till now. A survey report shows that out of four American, three of them are not satisfied with the ongoing war against terrorism. Hence, we can say that America has not yet won the war against terrorism, and much more is to be seen regarding terrorism across the globe. Terrorism is a much wider concept that the word itself that has led to injustice and bloodshed of ordinary people. Not only the ordinary citizens have lost their loving ones, but also thousand of terrorist has lost their life (Ekici, 2011). The war of the USA has weakened the Al-Qaeda group by killing the figureheads of its leadership. The US Army has stood against the terrorism and caused more damages to them as compared to the damages caused by them to the US government and ordinary people (Gleason, 2010). The damages caused to the USA were more tragic because it led to the loss of human life and financial downturn in the market. The attack of 9/11 resulted in the loss of more than 3000 life in the USA. Recently, the USA has won many battles against the terrorist acts in different parts of the world. Though we can be a decline of many terrorist groups, new terrorist groups have raised with the death of old terrorist leaders. Hence, terrorism can be termed as a virus that keeps on spreading among the Islamic groups in the name of Allah. We have seen people killing children and raping women to create terror among the common people in the Islamic state (Hauter, 2014). Suicide bombing has been seen in the terrorist attacks in London, Syria, Istanbul, France and many other parts of the World after the decline of the Al-Qaeda group. Hence, it can be seen that the winning of few battles against Iraq and Afghanistan has not led the American win the war against terrorism. When the people of America were asked about their views on the War against terrorism, around 71 percent people participating in the survey said that they had not won the war against terrorism. They have merely taken the revenge of 9/11 that will never get the world rid of terrorism (Ullman, 2006). Along with that, several other attacks can be evident all across the globe that has shaken the human society and global economy. Hence, the USA government must not only concern about terrorist attacks in its country but also take action against terrorism across the globe. Being the most powerful nation in the world, the USA has a responsibility to fight against terrorism and get the world free of terrorism. A question was raised when the US government decided to pull back its forces from the Middle East due to a huge loss of men and resources after the death of Bin Laden and Saddam Husain (Eijkman, 2012). It is important to note that it was merely a win of battle and the real war on terrorism is yet to be seen. Pulling back of the US troops from the Middle East may lead to the growth of the terrorist groups. With the availability of technology and sophisticated weapons, the terrorist groups will be more powerful and disastrous for the entire world. Hence, it can be said that the Americans have not yet won the war against terrorism until the world gets free of the hilarious act of atrocities. The answer to the question is significantly unknown as the terrorist activities of the Islamic State groups are dominating the news headlines for the past decade or so. The sudden ascendancy of new terrorist groups and terrorist activities in the European countries such as France and Denmark and the Middle East countries have raised the question about the safety of American civilians in the country and outside the country. Since the terrorist attack of 9/11 in 2001, the United States of America have launched counterterrorism strategy to demolish the roots of some terrorist groups such as al-Qaeda and ISIS (Eadie, 2016). In the recent year, American President, Barack Obama asked American Congress to initiate authorization of using US military force against the war situation with ISIS. The US intelligence department has successfully identified many terrorist attack plans to stop the rampant move of the largest terrorist group ISIS. Though the US government has tried to take control of the dangerous activities of ISIS including al-Qaeda, the terrorist groups have successfully managed to raise funds and control terrorist activities in the different parts of the world (Marchington, 2013). At the same point in time, one must not forget that the momentum of terrorist activities has reduced in the past decade or so as the US intelligence group and military forces had effectively launched counterterrorism strategy to end the war against terrorism without any compromise. Unfortunately, the threats of terrorism loom large as the terrorist attacks in Paris, bombings in Beirut and London attack have demonstrated the extreme lethal power of the Islamic State groups. Nevertheless, America has achieved notable success in the fight against terrorism as US drone attacks and anti-terrorism counter-strikes have killed several mega-minds of the terrorist groups (Boeke, 2014). Still, the removal of the top heads does not seem to affect the mindset of the terrorist groups as they somehow managed to recuperate and keep coming at humanity launching assaults in a different way. The new recruits of the Islamic State group have been a worry for the world security. According to estimation in 2001, the identified members and affiliates of al-Qaeda were 300 around the world. In 2015, in Syria alone, the number of al-Qaeda members was recorded to be 30,000 (Mockaitis, 2015). The present condition of Afghanistan is a lot more sustainable due to the success story of US Mili tary group. The US Military Force has forced the terrorist groups to step back from different parts of the country (Jenkins, 2008). On the other hand, in Syria, Iraq and some other Middle-East countries, terrorist activities are mounting up quite dramatically in the past couple of years. The United States fight against terrorism is large scale tactics to stop the terrorist invasions on humanity. Somehow, some countries of the world are still helping the terrorist groups for their marginal benefits. The special military forces of US and air strikes have weakened the leadership structure of some terrorist groups (Hamilton, 2015). As a result, the groups have fallen apart. The most dominant part of the war against terrorism is the safety of civilians and security of the United Nations. The United States of America has launched campaigns in Syria, Iraq and Afghanistan using unconventional tactics so that people and government can cooperate to construct a better future excluding terrorism. Most probably, the direction of securing national security is seemed to be the obvious motivation for the US government. The threats of terrorism have remained upon the world civilians. The security of the lives of American civilians is also in doubt. There is some sustainable and considerable success to be notified against terrorism although the strengths of the Islamic State group such ISIS and al-Qaeda has been boosted. The struggle against terrorism has been seemed to be magnified as media, and social media have been utilised by the terrorist group to form terror among the world civilians. The attacks in different parts of the world and the claims of the attacks have increased the fear of terrorism among the social public of the US. Therefore, one can say that the US may have won the battle but not the war against terrorism. Reducing the attacks and increasing civilians security will not do the job alone. The Islamic State groups must have been removed from its roots to cut off any chances of terror attacks on humanity. Understandably, though, people of America are quite a concern about their safet y as they have identified one of worst incident of terrorism. However, the entire population of the world including Americans will not give up against terrorism. The US government has taken all the necessary steps to stop the evil effect of terrorism to win the war within the near future. References Boeke, S. (2014). Transitioning from Military Interventions to a Long-Term Counter-Terrorism Policy.Terrorism and Counter-Terrorism Studies. Eadie, P. (2016). Counter-terrorism, Smart Power and the United States.Glob Policy. Eijkman, Q. (2012). Counter-Terrorism, Technology and Transparency: Reconsidering State Accountability.Terrorism and Counter-Terrorism Studies. Ekici, S. (2011).Counter terrorism in diverse communities. [Amsterdam]: IOS Press. Gleason, J. (2010). A Poisson model of incidents of international terrorism in the United States.Terrorism, 4(1-4), pp.259-265. Hamilton, L. (2015).To Win the War on Terror, We Must Win the War of Ideas. Hauter, B. (2014).Counter terrorism. Skyand, N.C.: Kivaki Press. Jenkins, B. (2008). Aviation security in the United States.Terrorism and Political Violence, 10(3), pp.101-111. Marchington, J. (2013).Counter terrorism. London: Brassey's.
Wednesday, April 22, 2020
Background information Multinational corporations (MNCs) are faced by various risks in their operation (Gallagher Andrew, n.d, p. 595). One of these risks relate to economic risks.Advertising We will write a custom report sample on The Practical Value of Purchasing Power Parity Theory specifically for you for only $16.05 $11/page Learn More For example, the cash flows earned from the firmsÃ¢â¬â¢ operations have to be repatriated to the parent company which means that the cash flows are subject to exchange rate fluctuations. According to Kim (2006, p.110), exchange rate refers to the price that one currency is traded for another. The exchange rates fluctuate from time to time. In a free market, the exchange rate is determined by market forces of demand and supply (Kim, 2006, p.110). Economists have developed different models that explain how the exchange rate is determined. One of the elements that managers of multinational corporations take into consi deration in their operation relate to exchange rate determination. This arises from the fact that exchange rate impacts the value of the multinational companies and hence their competitiveness. Additionally, managers of multinational companies must understand how the exchange rate is affected by external forces such as inflation and interest rates (Madura, 2010, p.233). This is due to the fact that increase in the rate of inflation and interest rate may erode the value of multinational company. Bartram, Dufey and Frenkel (2010) assert that fluctuation in the exchange rate is one of the major risks that multinational corporations are faced with. In extreme situations, exchange rate fluctuations may cause substantial losses to multinational companies and even bankruptcy. This underscores the importance of multinational corporations managing these risks professionally (Bartram, Dufey Frenkel, 2010, p.1). There are 5 main theories that explain how the exchange rate is determined. One o f these theories is referred to as the purchasing power parity.Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More To maximize their wealth, investors consider developing an optimal investment portfolio. To achieve this, they integrate different investment vehicles. Some of the investment vehicles considered relate to financial securities such as bonds. Other investors consider investing in the foreign investment markets as the best option. Examples of these markets include the forward and spot market (Buckley, 2004, p. 82). The investment deals made in these markets are intended to be settled in the future. Therefore, investors make expectations regarding the yield that they will receive from the forward and spot markets. One of the hypotheses that try to explain the impact of the investorsÃ¢â¬â¢ future expectation on the spot rate is referred to as the expectations hypothesis. Aim The obj ective of this report is to evaluate the practical value of Purchasing Power Parity theory to managers of multinational companies. T he report also evaluates whether the assertion that the forward rate is a valid predictor of the future spot rate according to the expectations hypothesis is true. Scope The report is organized into two sections. The first section illustrates the importance of purchasing power parity to managers of multinational corporations. The second part entails an analysis of the expectations hypothesis. Finally, a conclusion and a number of recommendations are outlined. The value of Purchasing Power Parity theory (PPP) to managers of MNCs This theory is based on the law of one price which states that the price of commodities in different locations have to be the same. Lack of uniformity in price means that there is a gap left for organizations to make more profit (Mankiw, 2011, p.390). For example, According to Gallagher and Andrew (n.d, p.595), Purchasing Power Parity Theory (hereafter referred to as PPP) postulates that it is the relative price of products prevailing between two countries that determine the exchange rate between these two countries. This means that a particular currency must have an equal purchasing power across different countries (Mankiw, 2011, p. 390). There are two main forms of PPP. These include: Absolute PPP Relative PPP Absolute form of PPP postulates that in the absence of international barriers, consumers will prefer sourcing their products from markets with the lowest prices (Buckley, 2004, p. 117). On the other hand, relative form of PPP stipulates that changes in the relative price of a particular basket of commodities between two or more countries determine the corresponding adjustment in the exchange rate.Advertising We will write a custom report sample on The Practical Value of Purchasing Power Parity Theory specifically for you for only $16.05 $11/page Learn More Understand ing the PPP theory enhances the effectiveness with which managers of MNCs make various operational decisions. For example, the relative form of PPP theory postulates that the consumersÃ¢â¬â¢ purchasing power vary due to existence of various types of market imperfections. These imperfections may arise from imposition of quotas, tariffs, and high transportation cost (Madura, 2010, p.234). To improve the demand of their products in the international market, managers of MNCs have to develop a comprehensive understanding of the exchange rate movement. This improves the effectiveness with which the firms adjust the price of their products so as to ensure uniformity with the consumerÃ¢â¬â¢s purchasing power between the domestic and the foreign market. Lack of uniformity in the consumersÃ¢â¬â¢ purchasing power may result into consumers shifting to the competitors products. The resultant effect is that the multinational corporation may experience a decline in its sales revenue (Madura, 2010, p.235). Therefore, the theory of PPP is important to managers of MNCs in making adjustment to the price of their products. The theory of PPP is also of great value to managers of MNCs in that it enables them to project how the exchange rate will respond to changes in the rate of inflation in the domestic and the foreign market. The theory asserts that the relationship between the exchange rate and the price of commodities in the foreign market is direct. On the other hand, the relationship is indirect with regard to price level in the domestic market (Ignatiuk, 2009, p.5). If the domestic country experiences an increment in the price level (inflation), the exchange rate of the domestic country relative to the foreign country will depreciate proportionately so as to reinstate the purchasing power parity between the two countries (Ignatiuk, 2009, p.5). Illustration 1 The exchange rate of country XÃ¢â¬â¢s currency which was initially stable experiences an increment in the rate of inflation with a margin of 5%. Similarly, the exchange rate in country YÃ¢â¬â¢s currency experiences an increment in the rate of inflation with a margin of 3%. According to PPP theory, inflation in the domestic and foreign market will affect the rate of exchange between these two countries. The formula below illustrates the corresponding change in the exchange rate between the two countries. ef= [1+ Ih/ 1+ If]-1Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More = [1+0.05/1+0.03]-1 =0.0194 or 1.94%. As a result of the high inflation in the domestic market compared to the foreign market, the exchange rate in the home country will appreciate with a rate of 1.94%. The resultant effect is that the price index in the foreign market will increase similar to the domestic market. Therefore, the domestic and foreign consumers will experience an increment in the price of commodities (Madura, 2010, p.236). The above illustration shows that the price level of commodities in the home and the foreign country will increase with 5%. This means that purchasing power parity between the two countries will be restored. Illustration 2 If the rate of inflation in the foreign country is higher than the domestic market, the foreign currency will depreciate. For example, if country YÃ¢â¬â¢s inflation is 7% while that of country X is 4%, the foreign currency will depreciate with 2.8% compared to the domestic currency as illustrated below. ef = [1+Ih/1+If]-1 = [1+. 04/1+0.7] -1 = -0.28 =-2.8%. Depreciation in the foreign currency as a result of the high rate of inflation will result into decline in the price of foreign commodities according to the domestic consumersÃ¢â¬â¢ perception (Madura, 2010, p. 236). The differential in the rate of inflation between the two countries will result into an increment in the price of commodities in the two countries with a margin of 4% (Madura, 2010, p.236). From the above illustrations, it is evident that the theory of PPP is important to managers of MNCs in that it enables them to understand how the exchange rate will be affected by inflation. The resultant effect is that managers of MNCs can be able to project their firmsÃ¢â¬â¢ future cash flows. The PPP theory enables managers of MNCs to determine the impact of exchange rate fluctuations on its future cost and revenues (Papaioannou, 2006, p. 236). The PPP theory can also enable a firm to formulate effective risk management strategies (Madura, 2010, p. 236). For example, the firm can be able to hedge against economic risks such as exchange rate fluctuations. Additionally, understanding how inflation rate differentials between countries impact the exchange rate can enable managers of multinational companies to make effective expansion decisions. The resultant effect will be improvement in the competitiveness of the company (Papaioannou, 2006, p. 135). The expectation hypothesis There are various financial instruments that investors can consider when investing in the foreign exchange market. Some of these instruments relate to investment in transactions of currencies (Buckley, 2004, p. 83). Examples of currency transactions include forward and spot transaction According to Wesso (1999, p.13), there are a number of hypothesis which have been formulated in an effort to explain the relationship between forward rates and spot rates. One of these theories is the expectations hypothesis asserts that the forward rate of exchange fully ref lects the future spot rate (Wesso, 1999, p. 13). For example, the hypothesis suggests that a 90-day GBP / EUR Forward Rate is a valid predictor of the GBP / EUR Spot Rate in 90 daysÃ¢â¬â¢ time. Choudhry (2004, p.61) emphasizes on the assertion that the forward rate is a valid predictor of the future spot rate. In their investment decisions, investors expect the spot rate will in the future. However, the hypothesis has been criticized by a number of authors. For example, Buckley (2004, p.125) asserts that the forward rate of is not always equal to the future spot rate. The forward rate tends to be higher than the future spot rate. This means that the forward rate over-estimates the spot-rate which means that the forward rate is not a valid predictor of the future spot rate (Choudhry, 2004, p. 62). It is also difficult for investors to project the future spot rate that will be applicable after a long period for example 30 years. Buckley (2004, p. 125) asserts that a study conducted on a number of currencies (Swiss Franc, US dollar, the Swiss Franc and the Deutschmark) with regard to the forward and spot rate revealed that the forward rate is only a valid predictor of the future spot rate if the period to maturity is 30 days and not 90 days. This illustrates that the accuracy of the forward rate as an estimator of the spot rate diminishes as the period to maturity increases (Choudhry, 2004, p.62). The criticism of expectations hypothesis is also emphasized by the fact that the future spot rate is determined by movement in forces of demand and supply in the exchange market. Investors cannot accurately predict how the market will change thus making it difficult to estimate the future spot rate on the basis of the forward rate. A study conducted by Kaserman on the validity of the expectation hypotheses revealed that forward rate result into undervaluation of the spot rate. This phenomenon is mainly experienced if the forward rate is on an upward trajectory. The hy pothesis assumes that investors are risk neutral in their investment. However, investors are risk averse in their investment process (Hallwood MacDonald, 2000, p. 35). Manzur (1993, p.18) assert that the risk averse nature of investors makes them to demand a premium in order to invest in the foreign exchange market. Therefore, a risk premium has to be included in the forward contract which means that the forward rate is not a valid predictor of the future spot rate (Manzur, 1993, p. 18). According to Buckley (2004, p. 125), the prevailing spot rate is a more effective predictor of the future spot rate compared to the forward rate. Conclusion From the above analysis, it is evident that the theory of PPP is very important to managers of MNCs. By incorporating the theory of PPP in their strategic management practices, managers of MNCs are able to understand how the exchange rates are affected by inflation. The resultant effect is that they are able to formulate effective strategies to deal with economic risks arising from exchange rate fluctuation. Effective risk management in the international market is vital in improving the value of multinational corporations. The theory also enables managers of MNCs to understand the exchange rate fluctuations and hence how their future cash flows will be affected. The theory also enables managers of MNCs to develop a comprehensive understanding of the effect of inflation rate differentials between the domestic and the foreign country. The resultant effect is that the firm is able to make optimal international expansion decisions. The report has also illustrated the criticisms that have been advanced with regard to the expectation hypothesis. The report has outlined various illustrations which show that the forward rate is a biased predictor of the future spot rate. For example, the validity of the forward rate as an estimator of the future spot rate is only applicable in the short term but not in the long term. Additionally , using the forward rate to estimate the future spot rate may result into over-estimation or under-estimation of the spot rate. Recommendations To be effective in executing their duties, managers of MNCs should consider the following. Incorporating the theory of Purchasing Power Parity so as to understand how the exchange rate is determined and how it fluctuates due to variations in the rate of inflation. To be effective in estimating the future spot rate, investors and managers should not only rely on the forward rate. However, they should take into consideration the market changes. This is due to the fact that the information provided by the forward rate is usually inefficient. Reference List Bartram, S., Dufey, G., Frenkel, M., 2010. A primer on the exposure of nonfinancial corporations to foreign exchange rate risk. Journal of Multinational Financial Management. Vol. 15, issue 4, pp. 394-413. Buckley, A., 2004. Multinational finance. New York: FT Prentice Ã¢â¬âHall. Choud hry, M., 2004. Corporate bonds and structured financial products. Amsterdam: Elsevier Butterworth. Gallagher, N., Andrew, S., n.d. Financial management: Principles and practice. New York: Freeload Press Inc. Hallwood, C., MacDonald, R., 2000. International money and finance. Malden: Blackwell. Ignatiuk, A., 2009. The principle, practice and problems of purchasing power parity theory. Munchen, Germany: Munchen GRIN Verlag. Kim, S., 2006. Global corporate finance. Malden: Blackwell. Madura, J., 2010. Financial markets and institutions. Mason: Cengage. Madura, J., 2010. International financial management. Australia: Cengage. Mankiw, G., 2011. Principles of macroeconomics. New York: Cengage Learning. Manzur, M., 1993. Exchange rate, prices, and world trade: New methods, evidence and implications. New York: Routledge. Papaioannou, M., 2006. Exchange rate risk measurement and management: Issues and approaches for firms. South Eastern Europe Journal of Economics. Vol. 2, pp. 129-146. Ne w York: International Monetary Fund. Wesso, G., 1999. The forward rate as an optimal predicator of the future spot rate in South Africa: An econometric analysis. Web. This report on The Practical Value of Purchasing Power Parity Theory was written and submitted by user Guillermo Larson to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.
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