Mgt448 Global Finance Paper

998 words - 4 pages

Warren Hill in his book, Competing in the Global Marketplace states that "international financing extended by banks around the world reporting to the Bank for International Settlements is estimated at $6.4 trillion, including $4.6 trillion net international lending. Total world banking assets are put at more than $20 trillion, insurance premiums at $2 trillion, stock market capitalization at over $10 trillion, and market value of listed bonds at about $10 trillion. In addition, practically every international trade in goods or services requires credit, capital, foreign exchange, and insurance" (Hill, 2004). Because of the large amount of currencies, as well as the wide variety amongst currencies, governments who wish to participate in trading must be able to protect their investments and transactions. This paper will to discuss the use of hard and soft currencies in aiding in the protection of those investments and/or transactions.Soft Currency is defined as, "weak currency who's value fluctuates often" (Investopedia). Soft currency is a less desirable means of payment when compared to hard currency, primarily due to reliability. Countries with soft currency tend to have frequent currency devaluation, credit payment difficulties and political unrest. Soft currency is typically not able to be exchanged for currency of other countries due to its unrealistic exchange rates. Some of the current soft currencies are the peso, the Baht, Zlotys and the Hong Kong dollar.According to Investopedia, hard currency is defined as "a currency, usually from a highly industrialized country, that is widely accepted around the world as a form of payment for goods and services. By its nature, hard currency is expected to remain relatively stable through a short period of time and to be highly liquid in the foreign exchange market. Another condition for hard currencies is that it comes from a politically and economically stable country such as the U.S. Europe, England, Australia, and/or Japan" (Investopedia).As hard currencies, the US dollar, European Euro, Francs and the Japanese yen are all usually backed by hard money policies, for example using gold, silver, or platinum to support the value of its currency with a real, tangible and lasting material that holds its value over a longer period and keep it stable. The primary strengths of hard currencies are that they are freely convertible and they do not depreciate dramatically in value. Hard currencies are usually in high demand and the exchange rate tends to appreciate because of steady high demand relative to supply, which is the opposite with soft currencies.Centuries ago, many types of currencies were used in one economy or country like using hard currencies as well as soft currencies. Gold, copper, and silver were commonly used during the barter system era. After the era of using soft currencies as a medium of exchange for goods and services, currencies like dollars and pounds were created. "The newly created...

Find Another Essay On MGT448 Global Finance Paper

MGMT420 Final Paper

1531 words - 7 pages transactions. Our paper writing will define what a multinational company is, how international finance is different from domestic finance, and why international financial management is important in doing business in the global market. A multinational corporation is a business firm incorporated in one country that has production and sales in several other countries (Resnick, 2012). According to BusinessDictionary.com, “an enterprise operating in several

Internal Finance and Globalization - Microsoft Corporation

1207 words - 5 pages joint ventures and acquisitions, the catch phrase throughout is Globalization. Globalization creates issues related to international banking and how decisions are made with regard to the various regulatory bodies in the U.S. and in foreign markets.This paper will concentrate on three areas of globalization; global investment banking, regulatory body financial decisions, and recent trends in international finance. The company chosen for this

New and Alternative Financial System

1504 words - 7 pages Introduction Since the late twentieth century, the rise of Islamic finance as a commercial practice has emerged as a ‘new’ and alternative financial system. This mode of finance has aimed to rival and eventually replace the conventional mode of interest-based finance that currently dominates the financial markets (Nagaoka, 2011). Instead, it is evident that Islamic finance has become a part of the global financial system rather than a

GLOBAL ECONOMIC GOVERNANCE: A NEW G20 REGIME?

2541 words - 11 pages Governance: A Legal Perspective, New Modes of Governance Project No. CIT1-CT-2004-506392, 2006. Rosenau, James, N., “Governance in the Twenty-first Century”, Global Governance 1(1), 1995, p. 13-43. Ruggie, John G., “Territoriality and Beyond: Problematizing Modernity in International Relations”, International Organization, 47 (1), 1993, p. 139-174. Scholte, Jan, A., “Governing Global Finance”, CSGR Working Paper, 88(02), 2002, Warwick: University

Global Political Economy Since 1945

2495 words - 10 pages The paper will discuss global political economy with specific reference to the important structures and trends in the global political economy since 1945. In order to define the related trends and structures of the global political economy one should have the prior knowledge of the political economy and its worth. The analysis and thorough understanding of the political economy reveals that it is the study of the role of economic processes

Financial performance of Islamic banking and conventional banking in United Kingdom- A Comparative Study

1423 words - 6 pages research findings to propose recommendations for better financial performance 1.5 -Research Overview: The Term Islamic banking (which is also known as Islamic finance) refers to the way of doing commerce and transactions which are Sharia compliance. For Islamic banks to work it must fully comply with Sharia .This type of Islamic economic system has now become a point of central attention in Islamic world, which covers 16.67% of the global

Project Finance Concepts, how it works and risks associated

5748 words - 23 pages involved in project finance in mitigating those risks, against a set of indicators devised by EIRIS. Finally the paper discusses how financial institutions could further decrease their risk exposure while investing in largeand often controversial projects, as well as looking at best practice examples within the financial industry.EIRIS chose explicitly to look at project finance as a financial instrument and itsrelated risks and not solely at

Islamic Finance Industry

1018 words - 5 pages and triggered the global financial crisis. These include toxic assets, derivatives, and conventional financial institution securities. (Hassan and Dridi, 2010). The goal of this paper is to understand the effect of financial crisis on Islamic banks in Malaysia during the middle of 2008. Towards this end, this paper examine data on changes in profitability which is profits in Ringgit Malaysia, changes in credit growth whether through bank lending or

forcasting

2098 words - 8 pages the forecast. Forecasting may be equal parts art and science, but the most dialed-in enterprises report using a solid, collaborative process for generating accurate forecasts upon which they build their business. IDG Research Services and CFOWorld.com recently conducted a survey of 306 global finance professionals. Most respondents report having a high level of confidence in their forecasts, and update those forecasts on a monthly or quarterly

Overview of Financial Affairs of Local Government of Multan

921 words - 4 pages Abstract Public finance deals with the financial management of public entities. This paper provides an overview of the financial affairs of local government of district Multan and identifies issues faced by the systems to deliver efficiently and effectively. It also highlights areas or improvement and opportunities to fund these activities. The district government heavily relies on the provincial grants and has very limited self generated

The Future of Management

835 words - 3 pages Numerous factors have and will continue to change the practice of management. Advancing technology, changing demographics including an aging workforce and vast diversity in the workforce, and globalization are just a few of the changes facing managers today. These factors will continue to change the ways in which managers manage. In this paper, I will talk about how globalization will change the future of management, and how it will affect new

Similar Essays

Global Finance Environment Paper

1591 words - 6 pages Global Finance EnvironmentThis paper will analyze the drivers and consequences of globalization, describe the risks associated with global investing, and explain the importance of cultural sensitivity and ethics in global finance. However, there first must be an understanding of what globalization entails. Globalization is the expansion of companies and entities into the international market; working, manufacturing, and selling or buying from

Total Quality Management (Tqm) Paper Mkt449

1449 words - 6 pages Total Quality Management (TQM) is an important aspect of every organization in today's competitive business environment. The purpose of this paper is to define total quality management, describe the impact of globalization on quality, compare and contrast traditional management styles with quality focused management styles and explain how TQM applies to the property-casualty insurance industry.Total Quality Management (TQM)Total Quality

Final Global Business Plan Paper: Cheap Co

6520 words - 26 pages IntroductionIn this paper we will conduct Global Consideration for the CheapCo it will include a detail look at areas that a company must address when they make the decision to go Global. CheapCo will address human resources, supply chain management, information technology, research and development, legal and ethical challenges that must be addressed as CheapCo moves into Bulgaria. By addressing the Global considerations it will clearly show the

Islamic Financial System: The Sukuk Or Islamic Bond

1127 words - 5 pages the future (Afshar, 2013). Furthermore, Islamic banking is known as a key contributor in the Islamic finance total assets in terms of its market share, which is of about 80.3% (Mubasher.info, 2013). Having to consider such progressive trend of the Islamic Finance and banking sectors in the global finance system, one mechanism or facet of Islamic financial system that strikes the most to be of great importance and is continuously embraced by the