Parity conditions in International Finance and Currency Forecasting Essay

Parity conditions in International Finance and Currency Forecasting - Essay Example These global investors are encouraged by the differences that exist among countries in the return rates on assets that are comparable. The theory also proposes that the exchange rate value on the foreign exchange market is affected by the transactions that are undertaken on the financial account of a country (Mukherjee, 2002). Madura, (2014) says that, the interest rate parity is an equilibrium. Why is this so? The author notes that, when the exchange and the interest rates are made to change and adjust to the forces in the market in a way that the interest arbitrage is not achievable, then an equilibrium results. The equilibrium is termed as the interest parity. Hence, when an equilibrium exists, the forward rate varies from the spot rate by an adequate extent. The variation is to such an extent that it counterbalances the interest rate differential among the countries’ currencies. For example, if an investor from the US obtains a greater rate of interest from his or her foreign investment; and he or she has to pay extra per entity of the country’s currency than what he or she obtains per entity when the country’s currency is sold forward, then there is a counterbalancing influence. Hence, if the investor has invested in the UK and the UK pound has an interest rate of 4%, while the equivalent in the US has an interest rate of 1%. Then, the two currencies’ interest rate differential is 3% (4 – 3). It implies that the interest rate differential is the profit the investors presume. However, the exchange rate must remain constant if the profit is to hold (Grath, 2011). In the example, the â€Å"pay extra per entity of the country’s currency†¦Ã¢â‚¬  is what is termed as the spot rate. While, â€Å"what he or she obtains per entity when the country’s currency is sold forward,† is known as the forward rate. Normally, when the spot rate is more than the forward rate, then a discount is in the

Pet owners who eat meat Case Study Example | Topics and Well Written Essays - 750 words

Pet owners who eat meat - Case Study Example This law come to the aid of those people who get infected by the infected people purposefully. A concern in regards to this issue comes with a thought provocation as to whether the law shall help in preventing the spread of the disease or the passage of the law shall escalate the spread of HIV/AIDS. The disease has been on the increase since the time it was recognized in the early 1980s. since then, its prevalence rate has escalated though to some extent the medics have tried containing it all along. There has been invention of drugs that can contain the harmful effects of the viruses (Kalichman, 76). The discovery of the antiretroviral has helped in prolonging the life of the infected people. Medics and researchers are also on the lookout researching the mechanisms through, which this disease could be cured. The criminalization of the intentional spread of HIV is not a new concept. The same law is in effect in states such as Illinois, Arizona, and in so many other states and nations in the world have adopted the same law to help curb the spread of HIV and AIDS. The cost of HIV and AIDS is too high. Living with the condition is awesomely high and the trauma of handling the disease is just unbearable though manageable. It would be unfair for one to subject another person to the same condition knowingly. One would therefore have to make a choice because the law would charge one with the responsibility of being free with their sexual partner in regards to their sexually transmitted infections. Failure of which one would be left with dares consequences and choices to make. The probable choices and conditions available for not revealing one’s status would be choosing to go to prison, loose one’s job, and the government housing. The law also would pose psychological effects on people; such issues that may cause stigma and self-concepts. One would feel humiliated and deprived of the right of health privacy (Kalichman, 24). The law also would penetrate th e cultural spheres and create a society where there is not private health information. People would thus be compelled to share their health status without hiding anything from another. There are issues that must be taken care of with the passage of this law lets people shy away from taking the test to hanker on ignorance of their status. There should be incentives associated with testing and in the event one is found HIV positive, the federal government should offer the infected person some incentives. The incentives should include giving of tax breaks and exempting one from heavy work backlog without reducing the pay. The law should also be molded to offer a manageable punishment to the already infected people who have knowingly transmitted the disease to other to prevent causing more harm to a person who has already be harmed by the fangs of the virus. The table below shows the pros and cons of passing the bill into law Pros Cons Option 1: Passing bill that would criminalize the k nowing transmission of an STD -More likely to inform partner, thus decreasing spread (C, A, V) -Medical advances would evolved quicker because the virus would not evolve as fast with less transmissions (C) -Allows person B to protect themselves ( -Less likely to be tested so in case of transmission, it would be unknowing (C) -Economic burden on state (C) -stigma/negative stereotypes that go along with STD’s increase (E) -Violate right to privacy (R) (HOWEVER, right to live trumps right to privacy ie antithesis for this point) -Takes