Forward exchange rate : It's a price that is announce in the market and the payment is at a future

date (30 60 90 , 180 or 360) Need contract. Se firma un contrato el de el precio

, , a
y se paga con precio hoy ,
s

del dolar la moneda la el contrato aumenta dinero, disminuye pierder dinero

o con
que se haga , ganas
s ,
.

rimply country's units

Foreign exchange rate :
exchange rate ,
is the price of one currency in of anothers currency

Fixed exchange rate regime : When the goverment regulate the exchange rate.

Par value : The rate at wich a currency is fixed

Flexible : When the goberment doesn't interfere

Eurocurrency The : currency of one country deport in a hank with another currency tiene que ver en otro pair.

y diferent currency
Direct quotations. If the price of Foring quotations
is in
your currency

( (
Ending rate
percentage change -
1 X 100

Beginning rate

Si er positivo re aprecia the Foreign currency , vi es negativo re deprecia the foreign currency

Indirect quotations : When the quotations expressed in

Foreign currency terms

percentage change :

(Beginningrate - 1 o en

Si es positivo se aprecia
the foreing currency , cuando es negativo re deprecia

ending :
Begininx (1 +% charge)

(1856 1) - x 100 = 6 ,
%.
53

ElosDTrsPo *
Y -

2050 T J de

La
Cuando haga eros ejercicios

.
1 Ver cual home
es
currency

.
2 Cual formulautilizar (directa o
indirectal
. Hacer la formula
3

4.
Mirar cual moneda se aprecia y se depresia
.

Lo

a . 1 , 23 +(1 + ( 20 / ))
- =
0 , 984

b . 1 , 23 x(1 + (20 % )) =
1, 476

:
2

Co
Multinational enterprise Is a company that has physical presence in foreign countries
Domestic firms: they import products and exports a products too, there are an
international competitors

Multinational we
m than domestic companier .

The owner has the monitor because if you don't pain attention that your employees do, its
possible that the profit decrease, because maybe your employer don't work, and the
company will failed
Dispersed shareholder ownership Nobody has a big percentage of corporations
Board of directors Control the managers 'its like the government of the
corporation'
Audit. Evaluating the managers
Management Managers make their money

The separation of the owners and the managers reduce the effectibly
The state produce what the people want ( comunim)
Company's try to give the products that consumers wants, because if nobody wants
Their products enter to bankrupt (capitalism)
The shareholder choose the directors that they want and the directors select the managers
But the directors has a boss (CEO), and how can you presure the manager if the manager is
the top director
You will have a people that try to produce the best things for the society ( socialism)

Concentrated ownership You have a powerfull stakeholders that control everything

You also have elections, every year
The controlling stakeholders, control the board of directors
The majority stakeholder can take advantage of the minority
stakeholders
Board of directors Control the managers 'its like the government of the
corporation'
Audit. Evaluating the managers
Management Managers make their money
 Try to benefit others takeholder

and employees

You only have a Goal . make

A profit and produce a product that
people need
product
several
or
goals
a
that people this reduce the
want
company
,
productivity

The model of the future is the stakeholder capitalism model, because its more ethical,
promote most powerful people
If the company operate well, its possible that in the future maximize their profits

Corporate governance

Take over: buy a company through the equity matrket.,

Corporate governance:
Some of these includes: the protection of the shareholders, equitable treatment of
shareholders and stakeholders, transparency and board of directors
 Youneed toconvence ,that theote directs
e

Interlocking directors Cuando una persona es director en 2 O más empresas

Leveraged buyouts When the price of the shares are low
They liquidate its assets in order to repay the loans used to
puchare the firms shares
You buy the equity and debt

Stock options Price

--- Sell
~

BUy

...
Time

The manager do something that increase the price

The manager buy shares at a good price and sell at a higher price

Dual classes of common stock Some shares has more votes than others
 Deposit : the bank pay you Keep something safe
Loan : When you pay an interest

money.
the oe
doen'tdeportof tants
ha

hankif the
The

Los bancos no tiene la capacidad de devolver el dinero a todos los depositares

En la mente de los personas tienen más dinero del que tienen en el banco
 Porque la 1 persona
pienra 9 tiene 100
·

y la 2
persona
piera que tiene
90 ·

the monetary base its part

-

of the central Bankimadatory

most of the money is

reserves
--
 · *
No se reparan
de el dolar
se
↳ ·

Changing
but slowly.

Intermedia
.

(Manage Float)
the rate
Governments intervin to reduce

The exchange rate its depending by the market

 Lower inflation

If the loans increase ,

the prices increasing
.

Tasa de cambio Fa

Libre Flujo Política monetaria

de capitale independiente
 Flexible Fixed

They don't monetary

independence

-I
 Its the country that oe

the curo to their own

currency
They can only compit for

producing better .

The monetary bare is

growing very sow , so the banks has less to create money supplier.

If our country is producing a money faster than the bare

currecy , that that
currency
value.
los

Dollarization means that you reemplace your national currency

.

Currency board you can create a system beliable

supply dollar its fart

The money of growing very
 > m
-
tiplicar

Direct/indirect O

* consolidated .
 The same product y no tiene ningun costo adicional
pero re pende a un precio diferente

Medellin B Bogota
$ 90 $100
Sell
pue

-
p ↑ The soods Ph the price
price Increase decrease because
because there are
demand
more offert there are many

Equilibrium : There are not profits oportunities

Desequilibrium There: are profit oportunities

Can be in one or more country.

Medellin Bogota

&d
* 10 000, #
L
100
-

S =

* =
10 000
,

100
= Lo

There are no business oportunities because there are no

profits

* Las moreda excluida

EUR , AUD ,
NZD , GBP

>
- (Actual -

Implied)

--
overmalve Implied

e
*
S =

oreign currency

valve
under
-
 s=
- P
PD
= -
PFC

The exchange rate starts in equilibrium (no profit oportunity) but change something in a country and
the prices changer
*
t = 1 P, = E 10 000
, P
,
= $200
Si = 100
/
LI
-
*
= 0% T = 4%

x(1 Ft)
+
t 2 P
= = P ,
x( + y )
*
P = P, +

10 000
.
(1 + 0 %) 100
+
(1 -
4% )

10 000 .

1046

e
1000
Se =

=
96, 14/$

If the Foreign currency present less inflation than the own currency there
currency apreciate

Si = "Thate" =
 Foreign direct

HPs = 20 %

↑$ 2 2 %
Se-Sist
=

(
.

jan,
2002
jaldes (1 + +
$)
5, =

DP Act
Se +0 %)

20
T
D
DE
5
.

-
=
. - B ..

(1 + 2 . 2
Se impliedo
% Overval-(Implied-Actual)
Actual

(D .
BA -
5 20)
.
I =
-
05 %
- 20
,
 Pars-through =
% change in price

% change exchange rate

the the
If price increase by the same percentage as the exchange rate pass-through is complete

or 100 %

de

7
 The real return its the money that you have after
the inflation

i = real returnt compeniation of inflation

(Begining rate -
End rate) I

Ending rate

- nomina interest Foraign corrency n interest

home)

-
(iE-i)

I
I

o-negative:Home currence en
1-

No profits oportunity

Foward rate :

*
Foward rate Sx :
(1 + i x days/360)
P
(1 + (i x days/360)
90/366))
[2
F =
1 48(F/B
,
+ +
(4 % x
= 4 ,
466

↓ + 18 % x
90/360)]
Ejemplo ,
to prestar plata al banco y te dicen que te da 4 %

de interes anual , pero to lo quiere sacar a los 3 meser

entonces divider 4 -4
y da 1 %, entonces ese seria el

interes real , y
el 4% seria el interer nominal
Foward Premium It's annual
The positive sign indicater that the foreign currency is selling toward at a premium
.

deposit bank to the other

One currency in a
currency
-
· rale
interest in Foreign currency
nominal
-

-e nominal interest rate in home currency

>
-
, 5%
5

- FSF = 225 Se e

-
- 2
It toward currency its less than the

You imuleto
12
2. 5% -

. Foward its premium

If towar currency
its grater the

Foward its discount

that the back
Days money come

When the toward premium is not equal

to-(it-p$) there are oportunities to make

money
.

El periodo que
voy a prestar la plata Siempre es por
- un año
-
 >
- =

=
x

-
-- =

You borrow in diferent currency

.

U =
are not in equilibrium it
, means that

there are more profit oportunity

over-stemete

under stemete
+
 The market its the forcast with a lot of people .

It's the market its efficient ,

its better to producing the forcat of
the markets than a
group of experts .

The market is like an

organism

If the market its exficient produce better because they lot information.
a prediction use a of

It's better to buy the prediction ,

because if you

lose money ,
it's the experts faults
 e open

Whencro
are

It's open 24 hours a

day ,
because when a place

in a world i night in other place is morning

.

When a large bank buy

to another large bank

When the client go

to a bank o cara de

intercambio y compra forcign exchange

 Low price

① Cuandocomprana un menor precio

del que venden obtienen gananaen
profit

They use strategier to reduce

foreign exchange rate

They want to make profits.

The speculators take risks . They make speculations.

Arbitrager explore the things that happen right

now . They not take risk .

days
to
borines
In
ASK >
-

4000 Copfurp Higer price

BID -3950 Cop/UD Low price