The February 1917 Revolution

The February 1917 Revolution The two revolutions of 1905 and 1917 were both different in their own ways. The 1905 revolution was ultimately crushed but it was crucial and necessary in succeeding to overthrow the Tsar in the February revolution of 1917. Key factors that played a part in the 1905 revolution were exploited by Bolshevik leaders such as Lenin, Trotsky and Stalin in the 1917 revolution. These Bolsheviks who were exiled learned from the 1905 revolution and capitalized on this in the 1917 revolution. The 1905 revolution was caused by a numerous amount of reasons. Discontentment with living conditions in Russia amongst the people was the main instigator of the revolution. While Russias labor force grew, the living conditions of the workers diminished. This saw a need for a better way of life for the workers. The Russo Japanese War between 1904 1905 caused even more discontent between the workers and peasants because of the inflation the war had caused. The workers who just had enough to eat before the war now starved. On January 9 1905, Priest Father Gabon led a unarmed and peaceful march to the Winter Palace in St. Petersburg to present a petition to the Tsar demanding the end of the war, industrial reform, a constituent assembly and more civil liberties for the Russian masses. The petition does not blame the Tsar for all the problems that have been caused rather than blaming those who come between the Tsar and his people. According to Nelson this petition reflects continuing confidence in the Tsar as the source of initiative and change in the system.  [1]  However, the Russian guard unprovoked opened fire on the people killing and injuring many of them. This dramatic event ultimately lead to the erosion of the popular image of the Tsar and the major sustaining myth of the Tsarist structure.  [2]   These two events were the ultimate reasons for revolution in 1905. However, we must examine as to why the 1905 revolution failed to overthrow Tsar. The political parties that were involved in the 1905 revolution shared the same goal of overthrowing the Tsar but they were divided rather than united. Each of the political parties had their own way of tackling Tsardom. Because of this it allowed the monarchy to crush any form of resistance against Tsardom. The political parties also had discontent amongst themselves: the Mensheviks disagreed with the Bolsheviks and also the moderate Socialist Revolutionaries disagreed with the radical Socialist revolutionaries. This also lead to the internal structure of the parties being weak and struggling to overthrow the monarchy. The propaganda programs led by the political parties failed to secure the support from the masses. Their ideas did not represent the wishes of the masses for social and economic reforms. The social democrats promoted the creation of a Socialist State through a class struggle. However, many of the workers failed to understand the revolutionaries ideas and only wanted an improved economic livelihood. The Socialist revolutionaries campaigned for the government takeover of land , even though the peasants wanted just the land to be divided amongst themselves. The 1905 revolution was momentous as it was the first time in Russia millions of people took part in a revolutionary movement. In and around Russia, Soviets were formed and acted as a somewhat government and ordered the workers not to pay taxes and to go on strikes. The peasants also formed a peasant union which was replicated along with the Soviets in the 1917 revolution. According to Lenin, the 1905 revolution was the Great dress rehearsal for the February revolution of 1917.  [3]  These new forms of worker organizations would later be the centerpiece of the successful revolution of 1917. After Tsar Nicholas II signed the October Manifesto in 1905, it seemed as though the needs of the workers and peasants were met. This manifesto gave the people certain civil rights, introduced the Duma and turned Russia into a constitutional monarchy. Even though Tsar Nicholas II promised certain civil rights and the Duma in the October Manifesto, he abused it shortly after the 1905 revolution. This infringement of the October Manifesto also led to the beginning of the February revolution. World War I impacted the February revolution the same way the Russo Japanese War had impacted in 1905. Defeat and causalities in the war disheartened the Russian population and wanted the Tsar to withdraw from the war. Following on in March 1917, workers in Petrograd went on strike demanding food: whereas in 1905 the workers were striking for civil rights. The war had inflated the price of bread and the Russians were unable to afford it. In spite of the strikes, Tsar Nicholas II ordered the army to take care of the strikers but unlike in 1905 on Bloody Sunday were the troops opened fire, this time they teamed up with the people. Unlike what happened in the 1905 revolution, this saw the Duma set up a provisional government to rule the country and consequently the workers and troops followed setting up their own branches of Soviets. The provisional governments ruled as long as it obeyed by the wishes of the Soviets. At this stage in Russia, it created the opportunity for a political party to form and take control of Russia. Lenin who had been in exile, along with Trotsky comprised the Bolshevik party and began to win the support of the masses. Their main slogans were Peace, Land and bread and All power to the Soviets. This attracted the masses which promised them a sustainable way of life: unlike in 1905 were this was not seen. The Mensheviks and the Socialist Revolutionary party lost the support of the people as decided to continue fighting in World War I. Lenin, backed by the Red Guard soon took control over Petrograd and by October the Bolsheviks had complete control of Russia. The revolutions of 1905 and 1917 differed in their own individual way. In 1905, the workers and peasants revolted on their own and even though political parties had tried to seize control of Russia, they failed in each respect to have the organization and support to do so. However, as we see in 1917, the Bolshevik party was far more organized and structured which lead to them taking complete control. While Lenin and other leaders were in exile, they had learned from the 1905 revolution and this knowledge proved invaluable in how to gain support of the masses and the importance of propaganda. Propaganda had made a significant difference from both revolutions. In 1905, the political parties did not promise anything to the people. However, as we see in the 1917 revolution, slogans such as Peace, Land and bread proved pivotal and unquestionably made the revolution successful.

Ethics and Religion

ABSTRACT. Although it seems that ethics and religion should be related, past research suggests mixed conclusions on the relationship. We argue that such mixed results are mostly due to methodological and conceptual limitations. We develop hypotheses linking Cornwall et al.
s (1986, Review of Religious Research, 27(3): 266–244) religious components to individuals
willingness to justify ethically suspect behaviors. Using data on 63,087 individuals from 44 countries, we find support for three hypotheses: the cognitive, one affective, and the behavioral component of religion are negatively related to thics. Surprisingly, one aspect of the cognitive component (i. e. , belief in religion) shows no relationship. Implications for research and practice are discussed. KEY WORDS: religion, ethics, cross-national study Introduction The link between religion and ethics seems obvious (Tittle and Wlech, 1983; Weaver and Agle, 2002). Religions, through the values they embody, often build th e basis for what is considered right and wrong (Turner, 1997). Religion produces both formal and informal norms and provides people with a freedom/constraint duality by prescribing behaviors ithin some acceptable boundaries (Fararo and Skvoretz, 1986). Such norms, values, and beliefs are often codified into a religious code such as the Bible or the Koran. In Christian religions, for instance, the Ten Commandments provide a broad basis of codified ethical rules that believing Christians must K. Praveen Parboteeah (Ph. D. Washington State University) is an Associate Professor of International Management in the Department of Management, University of Wisconsin – Whitewater. Parboteeah
s research interests include international management, ethics, religion and technology and nnovation management. He has published articles in numerous academic journals including Academy of Management Journal, Organization Science, Decision Sciences, Small Group Research, Journal of Business Ethics , Journal of World Business, Management International Review, International Journal of Human Resource Management, R&D Management and Journal of Engineering and Technology Management. Martin Hoegl (Ph. D. University of Karlsruhe, Germany) is Professor at WHU – Otto Beisheim School of Management, where he holds the Chair of Leadership and Human Resource Management. Before joining WHU, he served on the faculties of Washington State University and Bocconi University (Milan, Italy). His research interests include leadership and collaboration in organizations, management of R&D personnel, knowledge creation in innovation processes, and the management of geographically dispersed collaboration. He has published in leading international journals, including the Academy of Management Journal, Organization Science, the Journal of Management, Decision Sciences, and others. John B. Cullen is Professor of Management at Washington State University. He has also served on the faculties of the University of Nebraska, the University of Rhode Island, Waseda and Keio Universities in Japan (as a Fulbright lecturer), and the Catholic University of Lille in France. Professor Cullen is the past president of the Western Academy of Management. Professor Cullen is the author or co-author of four books and over 60 journal articles. His publications have appeared in journals such as Administrative Science Quarterly, Academy of Management Journal, Journal of International Business Studies, Journal of Management, Organizational Studies, Management International Review, Journal of Vocational Behavior, American Journal of Sociology, Organizational Dynamics, and the Journal of World Business. He currently serves on the editorial board of the Journal of Leadership and Organizational Studies and has served on the editorial boards of the Academy of Management Journal and Advances in International Comparative Management Journal. Journal of Business Ethics (2008) 80:387–398
Springer 2007 DOI 10. 1007/s10551-007-9439-8 follow in order to actualize what they believe in (e. g. , salvation). In turn, through daily exposure to orms, customs, laws, scripts, and practices, religions impart societal members with values and produce expectational bonds or ‘‘reciprocal expectations of predictability’’ (Field, 1979) that eventually become taken for granted. Such values often provide guides for what are considered ethical behaviors for most of the world
s religions (Fisher, 2001). Furthermore, in societies where one or few rel igions are dominant, the overarching core values of these religions are likely to be mirrored in secular values of society (codified law or non-codified social norms), which regulate everyday activity and thical behavior. However, despite the above conceptual tie between religions and ethics, research has provided mixed conclusions on the relationship (Tittle and Welch, 1983; Weaver and Agle, 2002). For instance, some studies have found no difference between religious and non-religious individuals on unethical behaviors such as dishonesty and cheating (e. g. , Hood et al. , 1996; Smith et al. , 1975), while a negative relationship was found between use of illegal substances and individual religiousness (Khavari and Harmon, 1982). The results are no more definitive for studies linking religions to usiness ethics. For instance, Kidwell et al. (1987) found no relationship between religiosity and ethical judgments of managers while Agle and Van Buren (1999) found a small positive relati onship between religious beliefs and corporate social responsibility. Furthermore, even studies linking marketing ethics with religiousness have found insignificant results (Vitell and Paolillo, 2003), whereby religiosity was found unrelated to consumer ethics. Taken together, the above supports Hood et al.
s (1996: 341) view of research between religion and ethics as ‘‘something f a roller coaster ride’’ and the difficulty to reach definitive conclusions about the relationship (Weaver and Agle, 2002). We, however, believe that the mixed results are mostly due to the following conceptual and methodological issues. First, most studies tend to consider only unidimensional conceptualizations of religion, such as church attendance or religious affiliations (e. g. , Agle and Van Buren, 1999; Schwartz and Huisman, 1995). However, De Jong et al.
s (1976) empirical test of the multidimensional view of religion clearly shows that ‘‘religion seems far t oo complex an arena of human behavior – as iverse and heterogeneous as human behavior – not to include many different and unrelated types of variables’’ (Dittes, 1969: 618). Therefore, it seems important to consider more multidimensional measures of religiosity to get a richer understanding of the relationship between ethics and religiosity. Second, even those studies that have considered multiple dimensions have done so without regard for conceptual support for the choice of their dimensions (e. g. , Agle and Van Buren, 1999). In addition, some studies have even included numerous dimensions and chosen those dimensions hat fit their results (e. g. , Conroy and Emerson, 2004). We believe that it is crucial to consider theoretical models that guide the choice of dimensions. Third, most studies have considered only one religion (e. g. , Angelidis and Ibrahim, 2004; Conroy and Emerson, 2004). Given the similarities of what is considered ethical behavior by th e major world religions (Fisher, 2001), we suggest considering cognitive, affective, and behavioral components of religiosity (rather than specific religious denominations) as predictors of ethics. Fourth, Weaver and Agle (2002) argue that many f the ethical measures have been attitudinal and may thus suffer from social desirability biases. It is therefore important to consider measures that do not elicit socially desirable responses. Finally, many studies have emphasized narrow, and for this subject matter, peculiar samples of undergraduate and MBA students (e. g. , Angelidis and Ibrahim, 2004; Conroy and Emerson, 2004; Kidwell et al. , 1987). Thus, in addition to issues of generalizability to wider populations, Tittle and Welch (1983) have also warned that student samples should be viewed with skepticism given the role of eligion at such ages. Research is needed using more comprehensive samples that target representative populations in terms of age and culture. Given the above, we investigate the relationships between multiple dimensions of religion and ethics. We use data from the World Values Survey (WVS) (2000) to examine how specific dimensions of religion (Weaver and Agle, 2002) are related to ethics and thus incorporate multiple religious denominations and multiple facets of the Kidwell, J. M. , R. E. Stevens and A. L. Bethke: 1987, Differences in the Ethical Perceptions Between Male

Secret Answers to Parcc Lal Essay Samples Grade 8 Uncovered

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The Pros and Cons of Hedging in Finance - Free Essay Example

Sample details Pages: 13 Words: 4029 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? This paper compares a number of strategies for managing foreign exchange exposures. Never hedging, hedging every exposure in our strategies is using a forward exchange contract and hedging on alternative occasions using a forward exchange contract. According to the selective hedging, whether to hedge or not is a very important decision which depends on the future spot exchange rate, which is determined by a number of forecasting techniques. Don’t waste time! Our writers will create an original "The Pros and Cons of Hedging in Finance" essay for you Create order The techniques include the random walk, the large premia model and a volatility model. The paper takes the China RMB verses the USD and JPY into consideration. This research shows the United States exporter those using hedging always perform better than China and Japanese exporters who are not or never hedging. We will use Sharpes model and the minimum variance model to compare a variety of strategies. Foreign Exchange transaction exposure exists when firms have financial obligations due to be settled in foreign currencies. For example, a firm may be due to be paid foreign currency (FC) in 3 months for some goods it exported. When the FC is received, they will need to be converted into the firms home currency (HC). If during the 3 month period the value of the HC has appreciated against the FC, the firm will receive less HC for each unit of FC. Depending on the magnitude of the HC appreciation, this can be costly for the firm. In this case, the firm can protect itself against this outcome by managing the exposure utilizing any of a large choice of alternatives. The first purpose of this research is to test the hedging effectiveness of FECs. In accordance with existing literature, we will compare the hedged position and fully unhedged position to examine the performance of FECs. For those companies who have hedged, they will realize a good hedge may be one that reduces risk to some degree with nil or minimal impact on return. Those others may prepare to accept a significant reduction in expected return in exchange for complete certainty. As a result, any research, like this research, the objective of identification of the better decision, must be made apparently that defines at the outset what is best. In this paper, we used two methods. First, from the traditional finance utility maximization framework the risk/return tradeoff is considered. Drawing on the thread of literature with regard to equity portfolios and diversification and hedging, the Sharpe-ra tio model of Howard and DAntonio (1984, 1987) is used. Secondly, taking a narrower view of hedging, assuming that it is only concerned with risk reduction, the minimum-variance model of Ederington (1979) is used. The second purpose of this paper is to expand on the exposure management analysis above, by introducing selective hedging strategies that are implemented as a result of forecasts of the future spot rate. In the case above the hedger was passive. That is, the decision was between the two polar extremes of hedging every exposure with a FEC or remaining unhedged; there was no middle ground. In contrast, a selective hedger makes a judgment on each exposure. The forecasts will determine whether a particular exposure should be hedged with an FEC or remain unhedged. Part II: Literature Review Literature Review A number of streams of literature can be identified in the area of FX exposure management/hedging. Most fundamental is the debate as to whether firms should hedge. This debate has been well covered in the literature and finance texts, such as Smith, Smithson and Wilford (1990). The accepted wisdom is that the firm can add value by hedging due to market imperfections and economies of scale. Another stream of literature uses surveys to investigate whether firms hedge and why, characteristics of firms that hedge, and what methods/instruments are used to hedge. A particular stream of relevance to this paper concerns passive and selective hedging. The finance literature is rich with papers that preach the benefits to investors of international equity and debt investment. Eun and Resnick (1994) extended this work by considering the impact on the investment results when exchange rate risk is hedged with FECs. While the results were mixed for various asset classes, the study did show impro vement of the risk-return outcome when the international investments were hedged. Glen and Jorion (1993) concurred, though when they extended the analysis to include the use of Blacks (1990) universal hedge ratio found hedging added little improvement. Eun and Resnick (1997) next introduced the distinction between passive and selective hedging. They discuss the literature concerning the forward rate being an unbiased predictor of the future spot and the subsequent literature identifying the risk premium in the forward rate that makes them in fact biased estimators. Eun and Resnick identify Messe and Rogoffs (1983) work on the efficiency of the random walk that showed it superior to or at least the equal to any forecasting technique as offering a selective hedge indicator. The implication being that the current spot is the best indicator of the future spot. For an exporter receiving a foreign currency, the random walk would suggest only hedging by locking in the forward rate when it is higher (that is, a more favourable rate for the exporter) than the expected spot. Eaker and Grant (1990) used this strategy and found it produced superior results to always hedging. Up to the work by Eun and Resnick (1997) the evidence was mixed in that most studies found some improvement though the results ranged from large improvements to minimal (and in some cases none) for various portfolios. For example, Glen and Jorion (1993) found that selective strategies offered no improvement over a fully hedged strategy for a portfolio of the world bond or world stock index. Morey and Simpson (2001) have recently extended this work by considering different data and expanding the set of selective hedging strategies. They consider hedging only when the forward premium is historically large and when a relative purchasing power parity model indicates an incorrectly priced bilateral exchange rate. Using ex post efficiency frontiers and return per unit of risk to compare the strategies th ey find that for a 12 month time period the large premia strategy (by the terminology used so far in the current paper this is a selective strategy) gives the best result, superior to the selective strategy based upon the random walk. In addition, they note that in all cases the unhedged strategy performs better than the always hedge strategy. Part III: Hedging Strategies Evaluated and Date Hedging and Foreign Exchange Market Hedging is defined here as risk trading carried out in financial markets. Businesses do not want market-wide risk considerations which they cannot control to interfere with their economic activities. They are, therefore, willing to trade the risks that arise from their daily conduct of business. Whether in industrial, commercial or financial businesses, the financial assets loans, bonds, shares, stocks, derivatives they trade allow them to hedge the risks that accumulate in their balance sheets in the course of business. From the point of view of the corporates and other firms trading in these risks has been also very much at the centre of financial developments. Investors holdings of securities or long positions in shares and stocks, bonds or loans expose them to the sort of risks with which the securities are associated. Part of this risk stems from the unique features of the security, but part is related to more common characteristics shared across securities. Two common macroeconomic risks are those associated with the exchange rate and the interest rate risk in a given economy. These risks can often be traded separately (see below). Pooling securities together in portfolios takes advantages of the idiosyncratic nature of the risks they bear to reduce the overall risk that investors face. For example, including the shares of exporting companies and non-tradable services in an equity portfolio helps to reduce the overall risk of the portfolio to a fall in external demand. From the economys point of view, portfolio pooling spreads risk across investors. Overview of Transaction Exposures for Export A variety of exchange rate risk in the literature differ somewhat. There is broad agreement, however, that the relevant dimensions are: i) certain versus uncertain transactions, ii) long run versus short run and iii) risks concerning the value of cash flows versus risk concerning the valuation of assets. For the purpose of this paper: -Transaction risk refers to the impact of exchange rate changes on the value of committed cash flows (cash flows that lie in the future, but the nominal value of which is known). These are mostly receivables (payables) from export (import) contracts and repatriation of dividends. Usually, the time frame for committed transactions (the time between contracting and payment) is relatively short. However, it can in some cases reach several years, where deliveries are committed a long time in advance (e.g. US dollar-denominated forward sales of planes or building contracts). -Economic risk refers to the impact of exchange rate movements on the pre sent value of uncertain future cash flows. It comprises the impact of exchange rate variation on future revenues and expenses through both variations in price and volume. -Translation risk refers to the impact of exchange rate changes on the valuation of foreign assets (mainly foreign subsidiaries) and liabilities on a multinational companys consolidated balance sheet. Usually, translation risk is measured in net terms, i.e. net foreign assets minus net foreign liabilities. It is clear that importing firms also face exchange rate risk. Transaction risk arises from foreign-currency denominated imports in the same way as from foreign-currency denominated exports. The economic risk to which an importing firm is subject concerns the variation of its costs induced by exchange rate fluctuations. As in practice most multinational firms are at the same time importers and exporters, their exposure to exchange rate risk is limited to net cash flows in a particular currency. Finally, tra nslation risk arises from the holding of foreign assets irrespective of the net direction of trade flows. A gauge of the actual relevance of exchange rate risk for firms can be found in the literature. Muller and Verschoor (2006) use a sample of 817 multinational firms that are exchange-listed and have their headquarters in the euro area to estimate their exposure to exchange rate variations. They follow a widespread empirical approach by estimating the impact of exchange rate variations on the firms stock market returns, controlling for the returns of the entire market. Over the entire period 1988-2002, 22% of firms had significant exposure to the China RMB exchange rate, 14% to the USD and 13% to the JPY. The exposure takes a different sign depending on whether the firm is a net exporter or a net importer. Interestingly, the majority of firms in the sample with an exchange rate exposure are net importers, i.e. euro appreciation increases their share value. The exposure of net e xporters is as follows: 3% of firms have exposures to the Chinese RMB, 6.5% to the USD and 3% to the JPY. The exposure increases over the time horizon under consideration. Only 14% of firms in the sample have significant exchange rate exposure as measured over a one-week period, but 67% of the sample firms have exchange rate exposures when measured over a 54-week horizon. The authors suggest that short-term exposures are more effectively hedged than longer-term exposures. Geographically, the authors note a concentration of firms with significant exposures in China, Japan, the United States and Singapore. Methodology and Data In this paper, I choose 100companies in each country, which are China, United States, and Japan. The data we need is found from DataStream. The following data are the variables Im going to use in the analysis: Foreign Exchange Spot Rate in China, United States and Japan from 2001 to 2009. Foreign Exchange Forward Rate in China, United States and Japan from 2001 to 2009. Return of Stock in 300 sample companies in China, United States and Japan from 2001 to 2009. Variance of Return in this 300 sample companies in China, United States and Japan. The Risk Free Rate in the financial market of China, United States and Japan from 2001 to 2009. The Market Return in the financial market of China, United States and Japan from 2001 to 2009. A variant of the volatility model of McCarthy (2002) is used that recommends hedging when the spot rate displays excessive volatility. Excessive volatility always exists when the short term volatility of mean exchange rates is higher t han the mean exchange rates in long term volatility. We gauge the short term volatility by using the moving mean of the previous 6 months exchange rate versus 12 months for the long term. Equation 1 shows the model and the application for the short run calculation: Equation 1: Two measurements of better are employed. First, the minimum variance model of Ederington (1979) is used. This model, equation 2, compares the variance of the unhedged returns to the variances of the various hedged returns. The basis of the measure is that less volatility, as measured by the variance, is preferred to more volatility. From equation 3 it follows that a positive outcome indicates that the hedge has a lower variance and under this decision rule would be preferred. A negative outcome indicates that the hedge increases the volatility of the returns and therefore the firm would have been better off remaining unhedged. Equation 2: Secondly, the Sharpe-ratio model of Howard and DAntonio (1984, 1987) is used. In its standard form the Sharpe ratio provides a risk adjusted performance measure as shown in equation 3: Equation 3: It can be used as in equation 4 to measure the improvement in performance that hedging offers, (if any), over remaining unhedged. Equation 4: When hedged with a FEC, the real cost of the hedge is an opportunity cost. This is because when the contract is entered, the firm receiving the FC would immediately enter the FEC and hence forgo the opportunity to benefit from a favourable spot rate movement. That is, if the FC appreciates, the firm would have been better off without the hedge. Thus, the true cost of the FEC per HC worth of FC sold forward is represented by equation 5 and from these the mean and variance of each alternative is calculated for input into equation 4. Equation 5: The above rules we used in this paper is the monthly FX data from 2001 to 2009. Specifically, we considered the bilateral foreign exchange rates are the USD and the Chinese RMB, the Japanese yen (JPY) and the Chinese USD. To calculate the volatility model, we need the Foreign Exchange data for every month date in 12 months in the last 9 years. Because of some limitation of data, the Japanese Yen analysis takes the period December 2001 to December 2009 into account. If the consideration of large period has been given to us and the Subprime crisis in 2007 which seriously impacted on each of these economies in our 3 sample countries and the foreign exchange volatile in a large range, we also need to create two sub-periods. The foreign exchange rates we used in analysis are received from DataStream and its the mean exchange rates at the end of day. The RMB / USD rate is in American terms where the Chinese is the unit. The JPY / USD quotes are in Japan terms, thus the USD is the unit . Its important to distinct each other when the results are being translated. If we make an assumption that the analysis takes a Chinese firm exporting and receiving USD into consideration, the Japan exporter had better anticipate the Japanese Yen depreciated, when the Japanese and Chinese exporters would like to see the value of USD climb up. As what I have mentioned in part I, introduction, comparisons would be made between the hedging strategies and the unhedged option in each sample companies in each country. Hence we could conclude which one is better, hedging or remaining unhedged. Because in any scenario it has equal possibility that the actual future spot rate will turn out to be more or less than the locked in forward rate, intuitively we could expected that the alternatives methods should be shown as a better choice. We could always use a FEC, whether I would happen will rely on the accurate forecast on future foreign exchange spot rate. Part IV: Finding and Results I will present the results in two sections: the Sharpe ratio effectiveness and the minimum variance model effectiveness. Table 1 shows the Sharpe ratio effectiveness and table 2 displays the minimum variance model effectiveness. Therere separate sub-tables in 3 bilateral rates each other. As what we discussed above, because of the conventional method in quoting the foreign exchange rate price, a passive answer for the RMB/USD rate gives us an indication when we compare superior outcomes with the unhedged position, while for the other two quotes, a negative number tells us that its an inferior outcome if we compare it to the unhedged position. As mentioned in the previous parts, the unhedged value of a companies and these companies always use an FEC hedge, which will be representative of the extreme values, the remaining hedges could form a combination of these two and hence the value will always volatile within this range. A value of 0 is an indication that the hedge have the sa me outcome with remaining unhedged. Table 1 Minimum Variance model (All by 100) Chinese RMB 6 months: 1 2 3 4 5 6 7 8 9 Full 7.322 2.154 0.205 -0.009 -7.678 0.44 0.366 0.312 0.301 Period1 -4.072 1.378 -6.567 -7.023 -4.012 -5.321 -1.764 -1.685 -1.498 Period2 -6.341 -1.435 3.768 3.805 -6.789 0.012 -0.207 -0.301 -0.207 Chinese RMB 12 months: 1 2 3 4 5 6 7 8 9 Full -39.178 -14.091 -16.031 -15.987 -12.456 -2.943 -0.992 1.907 -1.112 Period1 -20.147 -6.908 -38.709 -8.976 -31.003 -20.965 -20.147 6.666 37.598 Period2 -36.668 -15.413 -10.056 -10.789 -10.123 2.069 1.509 1.509 1.760 USD 6 months: 1 2 3 4 5 6 7 8 9 Full -9.076 -0.701 1.778 3.588 0.668 -3.901 0.106 0.218 0.226 Period1 -3 5.098 -14.087 -10.668 -5.512 -7.418 4.508 -0.166 7.588 -0.203 Period2 -5.034 -1.995 0.106 0.851 1.287 -8.806 1.246 1.457 3.057 USD 12 months: 1 2 3 4 5 6 7 8 9 Full -68.687 -10.607 5.146 7.098 -0.769 -30.407 1.000 4.509 8.267 Period1 -98.098 -15.041 -9.908 -10.168 -4.009 -41.387 -0.186 5.969 -0.206 Period2 -6.032 -2.318 0.287 0.951 0.107 -8.145 -1.256 0.025 -1.287 Japanese Yen 6 months: 1 2 3 4 5 6 7 8 9 Full -5.988 0.315 0.456 0.379 0.654 -3.082 0.000 0.000 0.001 Period1 -12.097 0.987 0.965 0.957 0.998 -3.590 0.000 0.000 0.146 Period2 -2.033 1.809 1.967 1.478 1.889 -4.067 0.000 0.000 0.147 Japanese Yen 12 months 1 2 3 4 5 6 7 8 9 Full -40.345 1.235 1.7 98 1.113 1.356 -25.097 0.000 0.000 0.209 Period1 -55.413 1.376 1.132 1.111 1.985 -25.908 0.000 0.000 0.276 Period2 -20.137 1.965 1.065 1.478 1.259 -24.075 0.000 0.000 0.301 For the Chinese RMB, the results for Minimum Variance model has shown that the data in full period calculation was using FEC formula in both periods of 6 and 12 month, the results can always hedge alternative offers superior outcomes than the unhedged position performed. By calculating the data for period 1, we found that for both period 1 and period 2 are inferior. Be subject to some other alternatives, FEC calculation for the 6 month, and only the 6 combinations proved that its a poorer result for the full period. In period 1, all alternatives that use hedging always performed better than remaining unhedged. Period 2 shows a combination of results. For the 12 month FEC, in the full period, hedging choices significantly were better than remaining unhedged. This pattern is the same for period 1. Period 2 shows less effective results for hedging. By summarizing the results, they remain consistent between the 3 month and 12 month. The majority of outcomes (70%) show no matter they chose full hedging or selective hedging with FECs, it can perform better than remaining unhedged. An interesting result is the strong performance of the random walk model. For both the full period and for period 1, the random walk model provides a large group of outcomes with us research, which the best hedge is indicated. We have discussed the above that the random walk theory tells us that todays spot rate have the best impact on forecast of the future spot rate. We could learn from this study, which if the forward rate is a better rate than the current spot rate, we could use an FEC. If the current spot is more appropriate than the forward rate, we could choose to remain the position unhedged. For the USD, in period 1, it has the most positive results (a superior result to remaining unhedged) for both the 6 and 12 month about FECs. For the 6 month FEC within period 1, some of the volatility and combination 2 are much better than those who still remained unhedged. The one who always perform stronger than others would always choose to do the hedging then the random walk. For the full period and period 2, we dont even spot any improvement from hedging. It is difficult for us to make it stable to conclude that for the Chinese RMB any remaining unhedged choices cannot catch up with the performance of hedging alternatives, but we can realize that the FEC in the 12 month and random walk can provide us with some outstanding outcomes. For the JPY, we cannot totally prove tht hedging could provide better performance. For the 3 month FEC, however, we have figured out a group of positive outcomes and some consistent relationship with the USD in period 1. To summarize the Sharpe measure, for both the USD (always hedge ) and the Japanese Yen (random walk), the results do tell us something that hedging could always provide companies with a better performance. Minimum variance model effectiveness Table 2 displays a relationship with the Sharpe ratio; the minimum variance model for the USD shows a strong outcome in the scenario of hedging, whether it is always with an FEC or selectively. For both periods of the 6 and 12 months, hedging could always produce a superior result to those who is still remaining unhedged. Totally, 72% of the companies who used hedging can perform superior to those are remaining unhedged. Table 2 Sharpe Ratio effectiveness (All by 100) Chinese RMB 6 months 1 2 3 4 5 6 7 8 9 Full -0.588 -20.154 0.205 -18.007 -0.678 1.146 3.909 4.156 5.607 Period1 -45.072 -19.378 -16.532 -17.023 -47.012 -15.321 -3.764 -1.685 -1.498 Period2 16.341 -10.435 -23.768 23.805 16.789 6.012 6.207 6.301 6.207 Chinese RMB 12 months 1 2 3 4 5 6 7 8 9 Full -19.076 -50.701 -41.778 -23.588 -50.668 -3.901 -0.238 5.218 -0.226 Period1 -85.098 -84.087 -34.668 -5.512 -70.418 -24.508 -20.166 -17.588 -50.203 Period2 8.039 -21.995 -30.106 -30.851 -31.287 6.797 6.643 6.382 6.664 USD 6 months 1 2 3 4 5 6 7 8 9 Full -29.076 -0.701 -10.778 -3.678 2.668 -13.901 0.106 -1.218 0.226 Period1 37.021 24.087 10.668 15.512 -17.418 0.513 1.166 -7.588 -0.203 Period2 -50.034 -6.995 -10.106 -11.851 1.287 -18.806 1.246 1.457 3.057 USD 12 months 1 2 3 4 5 6 7 8 9 Full -42.684 -12.603 -15.143 -27.098 -0.769 -30.407 1.000 4.509 8.267 Period1 -89.012 -12.045 -15.348 -10.234 -4.009 -41.387 -0.186 5.969 -0.206 Period2 -26.032 -29.318 1.897 1.097 0.107 -8.145 -1.256 0.025 -1.287 Japanese Yen 6 months 1 2 3 4 5 6 7 8 9 Full -55.988 -0.315 0.563 1.232 1.321 -3.082 0.000 0.000 0.001 Period1 -27.097 -0.987 0.567 1.468 0.998 -3.590 0.000 0.000 0.146 Period2 -32.033 -1.809 1.897 20.786 1.889 -4.067 0.000 0.000 0.147 Japanese Yen 12 months 1 2 3 4 5 6 7 8 9 Full -47.346 10.235 1.798 1.113 1.356 -25.097 0.000 0.000 0.209 Period1 -60.466 21.376 1.132 1.111 1.985 -25.908 0.000 0.000 0.276 Period2 -30.186 17.965 1.065 1.478 1.259 -24.075 0.000 0.000 0.301 Between the USD and JPY, the results from table 2 indicate that theres no doubt that using alternative hedging could always produce a superior outcome to remaining unhedged. In fact, we still can not find any proof that can prove the usage of hedging alternatives would consistently perform better than those are not using hedging, but at the same time, there did exists some better outcomes received from hedging, After all, we cannot draw any conclusion that remaining unhedged is the better choice. Part V: Conclusion I will make this conclusion from the outcomes of the research. The general conclusion that can be drawn from the results is that over the period considered, always those who use hedging always perform better than those dont use for an exporter with an Chinese RMB exposure,at the same time those who is remaining unhedged dont have appearent advantages compared with hedging for both the USD and JPY. The only thing we concerned about is that the Chinese RMB is supportive of those who argue that firms confronting an foreign exchange exposure should always use hedging to act as their shield in predicting exchange rate movements. In accordance with the selective hedging alternatives, the random walk model could always do their work better, it is especially shown in Chinese RMB exposures. I made this conclusions from the findings, we wouldnt generally introduce USD and the JPY to a firm. In a short-term period, this is probably extremely dangerous, because substantial financial damage wou ld be occurred by the volatility of foreign exchange, but the results suggest that for firms that have exposures repeatedly over a long period of time that hedging offers no benefit. It seems that the method of comparing the outcomes, either Sharpe or minimum variance, does not significantly impact on the findings. In terms of further research, it would be of interest to extend the study to consider other currencies though it does become difficult in this region with fixed or at least pegged exchange rates. A case study or some survey work may also be of interest to discover what firms are actually doing, if anything, about this issue. The issue will continue to be an important one, as many of these countries do experience volatile exchange rate movements. At the time of writing the Chinese RMB is reaching a six year high vis a vis the USD.