Power Reverse Dual Currency (PRDC) notes are an exotic financially structured product and are part of the Structured Notes Market. These instruments are utilized by investors to speculate or hedge in the forward foreign exchange market based on relative interest rate spreads between economies.
Historically this hybrid security rooted from principal protected notes that became useful instruments for Japanese investors. Their utility was realized in 1995, when a sharp decline in Japanese yields generated demand for a product that could provide a higher yield than available domestically ("Pricing Power Reverse Dual Currency Notes"). The principal protected notes were dominated in a base currency (traditionally, JPY) and paid a foreign exchange coupon, (originally in USD).
Reverse Dual Currency Note
Typically there was a zero-coupon floor associated with the floating rate notes to protect against risk associated with the base currency appreciating above the relative foreign currency. These zero-coupon products were referred to as Reverse Dual Currency (RDC) notes. The inverse factor associated with the RDC causes the coupon and value of the note to increase as the reference rate or base currency depreciates. The cash flows to the investor from RDC notes can be conceptualized as a strip of foreign exchange (FX) coupons.
Two factors contribute to the volatility of the instrument, relative interest rate risk and the FX rate associated with the note. These factors provide the financially engineered products with high potential profit but magnify the implied risk. Because Japanese rates continued to decline, the RDC’s alone no longer produced sufficient returns to investors. A leverage component was added to th...
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References
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Reich, Robert B. Nice Work If You Can Get It. The Wall Street Journal. 26 December 2003
Susan B. Anthony is a one of a kind lady. She didn’t care what people thought of her. She wanted to show the world what she believed in. Susan B. Anthony played a major role in women’s suffrage by being involved in temperance movements when she was young, being a part of the National Woman Suffrage Association and the Nineteenth Amendment was passed fourteen years after her death.
In the (1840-1920) women wanted to feel like they have a voice in politics and have the right to vote. Women lacked many rights such as the right to vote, to serve on juries, or to hold public office, women found it very difficult to do as they wanted in the 1800s, they were excluded from public life and were left in charge of the home and children. Susan Brownell Anthony was the most talked about person when it came to Women’s Suffrage. Anthony was an icon for the movement she traveled the country giving speeches, circulate petitions, and organized local women’s rights organizations. In the mid 1800s Susan worked as a teacher in Canajoharie, New York and was involved with the teacher’s union. National American Women Suffrage Association was
Susan B. Anthony is known worldwide, for her involvement as an abolitionist, education reformer, labor activist, suffragist, and the fights for the rights of women across the country. She was known at the beginning of the 1820 and withheld a long, eventful, meaningful life. She was known most importantly through the Gilded Age which was a time period where it withheld many political scandals, and displays of extravagant wealth. As a leading activist, a head of the support for the right of women to vote, and her legacy changed history for the entire nation of women since then as she stood for what she believed was right.
...er, J., & Tucker, E. (2012). Risk analysis and the security survey (4th ed.). Waltham, MA: Butterworth-Heinemann.
Another important person in women’s suffrage was Susan B. Anthony. In 1866, Elizabeth Cady Stanton and Susan B. Anthony helped establish the American Equal Rights Association. The AERA's job was to make it legal for women and African American males to vote. During the 1872 presidential election, Anthony and a group of women illegally voted in Rochester, New York. They were arrested, but through her schemes, she helped prove a point: it was consequential that women be allowed the right to
Caterpillar Inc. also faces the risk of its cash flow and earnings being affected by fluctuations in the exchange rates of currency, commodity prices, and interest rates. To control for this, the company’s Risk Management Policy ensures prudent management of interest rates, commodity prices, and exchange rates of foreign currency by allowing the use of derivative financial instruments. According to the policy, the derivative financial instruments are not supposed to be used for the purpose of speculation. In its pricing strategy, Caterpillar Inc. faces the risk of difficult shipping of its products. This risk can be encountered by offering its products on instalments and lease to its loyal customers (Caterpillar, Inc. (CAT), 2011).
Rousmaniere, Peter. “Facing a tough situation.” Risk & Insurance 17.7 (June 2006): 24-25. Expanded Academic ASAP. Web. 23 March 2011.
Susan B. Anthony was an activist for the Women’s Rights Movement. As a child, she was raised to be independent and outspoken. As a leader, she did just that. She stood up for what she believed in. Anthony organized, traveled, and spoke to people about what needed to be modified for women. Her parents were Quakers, which is a branch of christianity. They believed that all men and women should study, work, and live as equals (“Biography of Susan B. Anthony”). She adopted these thoughts and became a leader of the movement for women. She recognized her passion for women’s rights and dedicated her life as a suffragette, an advocate of women’s right to vote (“Biography of Susan B. Anthony”). A meeting with Elizabeth Cady Stanton led to lifelong friends in political organizing for women’s rights and women’s
Currency, like any other commodities, has a price, and sterling or Great Britain Pound (GBP) is no exception. Obviously, the price of the pound has depreciated against the US dollar during a long term, but it has appreciated against the US dollar over a short period of time. Indeed, according to the World Bank Data (2010), GBP price dropped slightly against that of the USD from 1.65 on September 1st 2009 to 1.55 on August 15th 2010. However, this survey also reveals that the price sterling to dollar has risen steadily between1.45 and 1.55 since last month. So, what causes the fluctuation of the GBP nominal exchange rate has provoked a heated discussion. The purpose of this essay is to explore the determinants of sterling nominal exchange rate and forecast its future trend. Firstly, it will give definition of nominal exchange rate compared to real exchange rate. Secondly, three factors that decided the GBP nominal rate of exchange will be analyzed. Finally, it will predict the future tendency of sterling exchange rate in accordance with the determinants.
The expanding global market has created both staggering wealth for some and the promise of it for others. Business is more competitive than ever before, and every business, financial or product-based, regardless of size or international presence is obligated to operate as efficiently as possible. A major factor in that efficient operation is to take advantage of every opportunity to maximize profits. Many multinational organizations have used derivatives for years in financial risk management activities. These same actions that can protect multinational organizations against interest rate futures and currency fluctuations can be used to create profits for those same organizations.
Susan B Anthony was a women’s rights activist and lead the National American Suffrage Association. She was also an agent for the American Anti-Slavery Society during the civil war. Anthony fought for equal rights for everyone and gave several speeches in New York to motivate people. One of her most famous quotes is “I declare to you that woman must not depend upon the protection of man, but must be taught to protect herself, and there I take my stand.” Women's right to vote was lead to the 19th amendment that was placed in 1920.
see, foreign exchange hedging was an area of key importance for AIFS given the level of currency
After the financial crisis of the late 1990s, the demands for risk management tools have increased. The investors have been effectively utilizing such products as KOSPI 200 futures and options, 3-Year KTB futures and USD futures to meet their hedging needs.
Daily in the USA about 38 million banknotes of various face value for total amount about 541 million dollars are issued (Facts about USA money).Dollars involve deep consequences both for the USA, and for other countries. Increase of its course relatively reduces the volume of export revenue in dollars, quite often involves more considerable, than change of an exchange rate, falling of the world prices, especially on raw materials. On the contrary, decrease in a dollar rate serves as the powerful tool promoting growth of the American export and a pushing off of competitors of the USA in foreign markets. At the same time import to the USA owing to effect of a rise in prices restrains. Thus, for the USA changes in the exchange rate of dollar anyway bring benefits and advantages.Reduction of leading positions of the USA in world economy is assisted by the international role of dollar which remains the main reserve and settlement means in world monetary system. Foreign currency reserves of the central banks of other countries for 61% consist of dollars, nearly 2/3 calculations in world trade are carried out in dollars; the dollar serves as a measure of value of many important goods (for example: oil) in the world market; in dollars 3/4 international bank crediting is made (Aleksandr Popov). Changes in the exchange rate of dollar involve deep consequences both for the USA, and for other countries. Increase of its course relatively reduces the volume of export revenue in dollars, quite often involves more considerable, than change of an exchange rate, falling of the world prices, especially on raw materials. On the contrary, decrease in a dollar rate serves as the powerful tool promoting growth of the American export and a pushing off...