Market Forecast

Forecasts are extensively used to support business decisions and direct the work of operations managers. The two major types of forecasts are qualitative and quantitative. Within each of these types are multiple methods and models. Qualitative forecasts are based upon subjective data. Quantitative forecasts are derived from objective data. Both methods are not suitable for all situations and circumstances. Each has inherent strengths and weaknesses. The forecaster must understand the strengths and shortcomings of each method and choose appropriately. One example of forecasting is the United States Marine Corps use of forecasting techniques, both qualitative and quantitative, to predict ammunition requirements.

The exchange rates risk that is associated with economic, transaction, and translation exposure in Indian market. From the analysis, anticipate the fluctuations that seem to occur in the next 24 months

Currency exposures assume many forms: they can be assets or liabilities; current or committed; contracted or merely forecast; they can be for trade, investment or balance sheet purposes. Cases of currency exposure can emerge at any point along the value chain, with various repercussions. Each requires a transfer of funds, and for each the rate of exchange is uncertain. Examples of different types of currency exposures are presented below.

1. The cost method derives its name from the fact that the Treasury Stock account is

The banking system, stock market, and financial markets in Russia were also seriously affected. Russian government had to pump tens of billions of dollars to rescue financial markets and banking system of the country.

Exchange rates play a pivotal role in the relationships between individual economies and the global economy. Almost all financial flows are processed through the exchange rate, as a result the movements and fluctuations of the exchange have a significant impact on international competitiveness, trade flows, investment decisions and many other factors within the economy. Due to the increasing globalisation of the world economy, trade and financial flows are becoming more accessible

In the article “Apple Forecasts First Sales Drop Since 2003 on iPhone Slowdown” by Adam Satariano he discusses many factors contributing to Apple’s first sales decline in over 13 years and what steps they plan to take to recover. Apple’s revenue was expected to produce $55.5 billion this quarter but the company believes it will be $50-$53 billion dollars (Satariano, “Apple Forecast”). This decreased is believed to show signs of saturation in the smart phone market. Along with iPhones, Apple also had a pause in its iPad and Mac sales last quarter (Satariano, “Apple Forecast”). Apple is still overwhelmingly profitable but they cannot rely on the adoption of smart phones to carry the iPhone sales anymore.

  This method may results in multiple answers or not deal with non conventional cash flow

11. Accelerated methods of amortization result in a periodic amortization charge that is less in each succeeding period than the prior period. There are a number of variations of the accelerated methods, such as the declining balance method and the sum-of-the-years’-digits method. These methods are appropriate when an asset contributes to revenue

Given the nature of its business, Jaguar is faced with three types of exchange rate exposure (1) Transaction, (2) Translation and (3) Economic . Transaction exposures arise whenever the firm commits (or is contractually obligated) to make or receive a payment at a future date denominated in a foreign currency. Translation exposures arise from accounting based changes in consolidated financial statements caused by a change in exchange rates. In this case we primarily focus on the Economic exposure -also known as Operating exposure or Competitive exposure- of Jaguar.

In 1949 Alfred Winslow Jones, a sociologist investigating fundamental and technical research to forecast the stock market for Fortunemagazine, set up an investment fund with himself as general partner. The fund followed three key tenets: (1) always maintain short positions, (2) always use leverage, and (3) only charge an incentive fee of 20 percent of profits with no fixed fees. Jones called his portfolio a “hedged” fund (eventually shortened to “hedge fund”) because he had short positions to offset his long positions in the stock market. Theoretically, the overall portfolio was hedged against major market moves.

Journal written by Robert G.Rulland from Northeastern University and Timothy S.Dauprik from Univesity of South Carolina discussed about the foreign currency translation and behaviour of exchange rate. Consequently, the first controversy is which translation method provides the most meaningful translation gains and losses, for example which method provides the most reasonable measure of the foreign entity's exposure to movements in exchange rates. The second controversy is whether translation gains and losses should be reported in the income statement or whether they should be deferred and shown in the stockholders' equity section of the balance sheet. Two major controversies exist in the translation of foreign currency financial statements is first which translation method should be used, and the second is how should the resulting translation gains and losses be reported. When items translated at current exchange rates, translation gains and losses result. Translation methods vary as, to which balance sheet items translated at current and which at historical exchange rates. This paper proposes two criteria for settling these questions which are based upon the actual pattern of exchange rates existing between the U.S. dollar and other currencies .It is argued that application of these criteria would result in a more objective and economically meaningful translation process than exists under current rules.

"Beating the market" is a difficult phrase to analyze. An investor, portfolio manager, fund or other investment specialist produces a better return than the market average. The market average can be calculated in many ways, but usually a benchmark, such as the S&P 500 or the Dow Jones Industrial Average index, is a good representation of the market average. If your returns exceed the percentage return of the chosen benchmark, you have beaten the market. Generally speaking, we totally cannot beat the market since investment fees are one major barrier to beating the market. If you take the popular advice to invest in an S&P 500 index fund, your investment will perform identically to the S&P 500 and investment fees will be subtracted from those returns, preventing you from beating the market. Look for funds with ultra-low fees of 0.1 to 0.2% annually and you 'll be close to equaling the market. Taxes are another major barrier to beating the market. When you pay tax on your investment returns, you lose a significant percentage of your profit -15% or more, depending on your holding period. Investor psychology presents a third barrier to beating the market. People have a tendency to buy high and sell low because they 're inclined to buy when the market is performing well and they sell out of fear when the market starts to drop. This buying and selling behavior makes it impossible to beat the market.

This technique looks for the interest rate that equals the present value of inflows and outflows.

Great Eastern Toys is a company in Hong Kong that exports a huge percent of its total sales to the North American and European markets and hence is exposed to currency risk. Previously, the company was occupied with expanding their business and the company 's management had never given much attention to currency risk until their recent meeting with their banker. The banker pointed out that the depreciation of the European currencies during the previous two years had resulted in a substantial loss of income. The company 's management was indeed convinced that they should begin to devote more time and manage their currency position. In this report, we are going to explore the different options for Great Eastern Toys to hedge