Make use of Forecasting Strategy in Purchase and Sale of Foreign Currency

 Essay upon Use of Forecasting Technique in Purchase and Sale of Foreign exchange

QUANTI R51 D. M. K. Gutierrez Drive 22, 2012

Company History

Definition of conditions

Objective

Analysis of Alternative

Advice

Located in the Philippines Consumers: 99% export to OCEAN countries, European countries, India and USA Suppliers: 70% via Japan, 30% from China, MARINE countries and Philippines

Practical currency •Currency used in the primary economic environment where a company functions

Foreign exchange risk •The risk that an investment's or an asset's value will change due to changes in foreign currency rates

Forwards contracts •An arrangement to acquire or sell currency at an agreed day in the future, for a price agreed today

Technical analysis •Analysis where famous price actions predicts long term price action

Fundamental examination •Analysis which in turn seeks to forecast upcoming currency value through the analysis of all of the economical, political and social elements relevant to it

1st week Collections JPY USD PHP 2% 10% 0% 12%

2nd week 0% 10% 0% 10%

3rd week 15% 0% 1% 16%

4th week 33% 29% 0% 62%

Total 50 percent 49% 1% 100%

Obligations JPY UNITED STATES DOLLAR PHP

five per cent 0% 13% 18%

2% 0% 1% 3%

10% 0% 9% 19%

48% 0% 12% 60%

65% 0% 35% 100%

Particular date

Dollar

JPY Am ount

JPY-USD Price

Ave. JPY-USD Rate

Option Cost

% Loss

2011/1/18 2011/1/31 2011/2/25 2011/3/31 2011/4/29 2011/5/31 2011/6/28 2011/8/31 2011/10/27 2011/11/22 2011/11/22 2011/12/20 2011/12/23

20 732 610 620 600 321 271 380 390 90 450 500 300 a few, 194

1, 648. eighty 59, 658. 00 49, 715. 00 50, 840. 00 twenty four, 390. 00 26, 001. 00 twenty one, 850. 73 29, 051. 00 30, 328. 00 7, 695. 00 thirty four, 627. 60 31, 120. 00 twenty three, 280. 00 413, 205. 03

82. 44 81. 50 81. 50 82. 00 eighty. 65 seventy eight. 00 eighty. 63 76. 45 seventy five. 20 seventy six. 95 seventy six. 95 77. 80 seventy seven. 60 79. 28

82. 5670 82. 5670 81. 5721 seventy eight. 5721 83. 3388 81. 1158 80. 5207 77. 0640 76. 6515 77. 4609 77. 4609 seventy seven. 8641 77. 8641 seventy nine. 82

you, 651. 00 60, 439. 00 forty-nine, 759. 00 50, 575. 00 55, 003. 00 26, 038. 00 twenty one, 821. 00 29, 284. 00 up to 29, 894. 00 7, 746. 00 34, 857. 00 31, 146. 00 3, 359. 00 416, 572. 00

(2. 20) (781. 00) (44. 00) 265. 00 (1, 613. 00) (37. 00) 29. 73 (233. 00) (566. 00) (51. 00) (229. 50) (26. 00) (79. 00) (3, 366. 97)

0% -1% 0% 1% -3% 0% 0% -1% -2% -1% -1% 0% 0% -1%

Time

Dollar

JPY Am ount

JPY-USD Rate

Ave. JPY-USD Rate

Opportunity Cost

% Loss

2011/1/18 2011/1/31 2011/2/25 2011/3/31 2011/4/29 2011/5/31 2011/6/28 2011/8/31 2011/10/27 2011/11/22 2011/11/22 2011/12/20 2011/12/23

20 732 610 620 600 321 271 380 390 100 450 four hundred 300 your five, 194

one particular, 648. 70 59, 658. 00 49, 715. 00 50, 840. 00 48, 390. 00 26, 001. 00

82. 44 81. 50 81. 50 82. 00

82. 5670 82. 5670 81. 5721 seventy eight. 5721

one particular, 651. 00 60, 439. 00 forty-nine, 759. 00 50, 575. 00

(2. 20) (781. 00) (44. 00) 265. 00 (1, 613. 00) (37. 00) 29. 73 (233. 00) (566. 00) (51. 00) (229. 50) (26. 00) (79. 00) (3, 366. 97)

0% -1% 0% 1% -3% 0% 0% -1% -2% -1% -1% 0% 0% -1%

21 years old, 850. 73

29, 051. 00

NET OPPORTUNITY COST = JPY3. 4M

70. 65 83. 3388 seventy eight. 00 81. 1158 85. 63 70. 5207 seventy six. 45 seventy seven. 0640 75. 20 seventy six. 95 76. 95 seventy seven. 80 77. 60 seventy nine. 28 seventy six. 6515 seventy seven. 4609 seventy seven. 4609 seventy seven. 8641 77. 8641 79. 82

55, 003. 00

26, 038. 00 21, 821. 00 29, 284. 00 up to 29, 894. 00 7, 746. 00 thirty four, 857. 00 31, 146. 00 23, 359. 00

29, 328. 00 7, 695. 00 34, 627. 50 thirty-one, 120. 00 23, 280. 00 413, 205. goal

416, 572. 00

To minimize the foreign exchange risk upon short-term order and revenue of values

Limit just to technical analysis (study based on historical data)

Current:

•Convert by month end or when needed

Option:

•Enter into forwards forex legal agreements using Forecasting Techniques

62. 000

eighty. 000

90. 000

120. 000

20. 000

40. 000

JANUARY MARCH MAY

2009

THIS SUMMER SEPTEMBER THE FALL OF JANUARY DRIVE MAY

Volatil. USD-JPY Level

2010

COME JULY 1ST SEPTEMBER NOV JANUARY MAR MAY

2011

JULY SEPTEMBER NOVEMBER

Volatil. USD-JPY Price

2012 JANUARY FEBRUARY MARCH APRIL MAY POSSIBLY JUNE SEPTEMBER AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER

Since Dec seventy seven. 873 77. 495 79. 083 79. 836 77. 839 77. 424 seventy five. 435 seventy four. 337 72. 928 71. 835 72. 064 seventy two. 262

By Jan 76. 938 77. 828 78. 417 70. 173 79. 176 seventy seven. 758 75. 763 74. 659 73. 245 seventy two. 148 seventy two. 374...

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