The Effects of Nature or Nurture on Early Human Development Essay Example for Free

The Effects of Nature or Nurture on Early Human Development Essay Human development is a very complex process – from conception to death. There has been a long debate on whether human development is determined by nature or nurture. If their growths were all guided by nature only, they would all be born with a mind of â€Å"blank slate†. This means that they do not have any inborn ability to do anything when they are born. On the other hand, if their growth was determined by nurture only, it would mean that they were fully equipped with all the skills they need in their lives when we are born. In other words, all the physical and mental skills they have right now would have been inherited from their parents and the environment they grow up in has no effect. This essay will focus on the effects of both nature and nurture on three major stages of early human development: fetal, early childhood motor development and learning how to talk. All of these stages are guided by both nature and nurture, and not just one. First of all, fetal development in a mother’s stomach is first guided by nature and continues with nurture. The hereditary information from both parents in the fetus is not affected by nurture. For example, the gender, skin, hair, eye colour and general body size are genetically determined and have nothing to do with the environment that the fetus is in. Also, the parents’ pre-existing genetic health conditions might also affect the health of the fetus as well, such as diabetes. Once these information are set, the fetus continues to grow and many environmental factors affect its development. For instance, the health of the mother and her life style have a profound effect on her baby. For instance, a baby that began its life healthy at first might develop some birth defect due to the mother’s alcohol abuse. On the other hand, a mother can reduce her chances of getting a fetus with birth defects by taking certain vitamin supplements. Once the baby is born, it starts to learn how to move its body parts. Most infants in the same given environment develop their motor skills at more or less the same order, such as rolling over, sitting without support, standing while holding on furniture, crawling, and then finally walking. This is because they are born with the same set of muscles and bones that they learn how to use – the â€Å"nature† part of motor development. However, it is important to notice that the rate of learning these motor skills differ due to the â€Å"nurture† side of development. For example, an infant that practices walking with its parent may start walking on its own earlier than another infant that received no help. Also, an infant that receives much visual and auditory stimulation, such as playing with toys, develops its motor skills faster than an infant that received none. While the baby continues to learn how to move around on its own, it also learns how to talk – an extremely important skill. Speech development is also determined by both nature and nurture. All babies that are born with no birth defects are equipped with physiological requirements for speech: lungs, voice box, and mouth. They also need a properly working brain and nerves to control these body parts and to mentally form sentences. These form the nature part of the speech development because they are the things that the babies are born with. However, they could be useless if the baby does not learn how to use them properly, and this is where the nurture part of the speech development comes in. A baby that is constantly spoken to by others learns how to talk faster. In an opposite case, a baby that receives very little to no interaction with others may not acquire language at all. Speech not only involves talking, but it also involves very important social skills and body language, and a baby can learn these skills faster if it constantly receives proper stimulation from its caregivers. In conclusion, early human development is controlled by both nature and nurture – in fetal development, motor development, and language acquisition. The nature part of development includes the things that the infants are born with, and the nurture part of development includes the environmental factors that the infants receive. Most babies are born with more or less the same basic requirements for life, but the rate at which they develop their skills differ due to the nurture part of development. Overall, nature and nurture cannot be separated because they depend on each other. WORKS CITED 1. Atkinson. R. L. â€Å"Interaction between nature and nurture† in J. Slaght. Reading and writing Coursebook. 2. ABOUT. COM http://pregnancy. about. com/cs/fetaldevelopment/l/blfolatefacts. htm 3. Kidshealth from Nemours. http://kidshealth. org/parent/system/ill/birth_defects. html 4. Ludington-Hue, Susan. How to have a Smarter Baby United States and Canada: Rawson edition, 1985. 5. The Origin of Languageand Communication. http://www. trueorigin. org/language01. asp 6. Wikipedia. http://en. wikipedia. org/wiki/Genie_(feral_child) [ 1 ]. R. L. Atkinson â€Å"Interaction between nature and nurture† in J. Slaght. Reading and writing Coursebook. P162 [ 2 ]. Ibid. P162 [ 3 ]. Ibid. P163 [ 4 ]. Kidshealth from Nemours. http://kidshealth. org/parent/system/ill/birth_defects. html [ 5 ]. ABOUT. COM http://pregnancy. about. com/cs/fetaldevelopment/l/blfolatefacts. htm [ 6 ]. R. L. Atkinson â€Å"Interaction between nature and nurture† in J. Slaght. Reading and writing Coursebook. P163 [ 7 ]. Ibid. P163 [ 8 ]. Ludington-Hue, Susan. How to have a Smarter Baby United States and Canada: Rawson edition, 1985. [ 9 ]. The Origin of Languageand Communication. http://www. trueorigin. org/language01. asp [ 10 ]. R. L. Atkinson â€Å"Interaction between nature and nurture† in J. Slaght. Reading and writing Coursebook. P163 [ 11 ]. Ibid. P163 [ 12 ]. Wikipedia. http://en. wikipedia. org/wiki/Genie_(feral_child).

Science Run Amuck in Brave New World :: essays papers

Science Run Amuck in Brave New World Brave New World is a novel set hundreds of years into our own future. On Earth, the Nine Years War tore the planet apart in the year A.F 178. Eerily, anthrax bombs dropped from the sky killed scores of people, what we in the post 9/11 world fear the most. When the dust settled, mankind banded together to create a new world called the â€Å"World State.† Their motto is â€Å"Community, Identity, Stability,† and it is all too much present as you will see. This future is a severely different place. To stabilize the populace, mankind has cloned each other by the thousands. Babies are conditioned by a caste system, and everyone grows up to do a specific job. Cold and sterile science replaces religion, individuality, and risk. Everyone is encouraged to pleasure themselves (through promiscuity, recreation and drugs... soma,) but not to have a bad day. This is reminiscent of the â€Å"Roaring 20’s† and the â€Å"free love† movement of the 1960’s. In this future, to be monogamous, bond, or soul-search would single you out as a loner. Here, â€Å"everyone belongs to everyone else.† The years once noted by A.D (Anno Domini, or After Christ) are replaced by A.F (After Ford.) Ford’s philosophy became a religion, wiping out over two thousand years of Christianity from world history. Now there is no history, except that which existed After Ford, it was outlawed. As we all know, Henry Ford introduced the assembly line into modern society. In A.D, The assembly line was a more proficient way to produce the automobile. In the brave new world, however, the assembly line mass-produced human beings themselves. The brave new scientists discovered a way to progress the cloning process. They clone up to 96 embryos from a female ovum by Bokanovsky’s process. Embryos were then â€Å"bottled† and put on an assembly line that moved 33 centimeters a day. On the line, the fetuses were tampered with and they received early conditioning to be part of one of the five castes. â€Å"Alpha† was the highest class (think rocket scientist,) and Elipson was the l owest class (think gas station attendant.) These babies are not born of a mother’s womb, but â€Å"decanted† (unbottled.) They receive more conditioning and undergo â€Å"hypnopaedia† – a sleep teaching process where beliefs are inserted into their thoughts. Young children as young as seven years old are encouraged to be promiscuous and experiment with sex.

Why There Is a Lack of Women in Leadership Roles

Leading and Managing People | Dr Andrew Rowe | Manchester Metropolitan University Business School | Elizabeth Ann Marku- 10996807| In recent years, women have increasingly moved into leadership positions within public and private sector organistions. It is notable, however, that their presence is less apparent in the higher echelons of professional and organisational structures where the greatest influence and power in the decision making process resides. Despite the plethora of research examining this issue, there is still conflicting opinions as to why this is the case.This assignment asks you to review the key contributions to this debate and examine the implications for effective leadership in the 21st century. | | Leading and Managing People | Dr Andrew Rowe | Manchester Metropolitan University Business School | Elizabeth Ann Marku- 10996807| In recent years, women have increasingly moved into leadership positions within public and private sector organistions. It is notable, how ever, that their presence is less apparent in the higher echelons of professional and organisational structures where the greatest influence and power in the decision making process resides.Despite the plethora of research examining this issue, there is still conflicting opinions as to why this is the case. This assignment asks you to review the key contributions to this debate and examine the implications for effective leadership in the 21st century. | | â€Å"When millions of women rise around the world, we won’t need an International Women’s Day. When millions of women rise around the world we’ll be able to harness all the days, years and resources we need to deal with climate change, poverty, violence and war†. (Womens History Month March 8 2012) Women in Leadership PositionsBreaking through the glass ceiling †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Purpose of Report In 2011 an article in the Guardian Business Newspaper stated â€Å"The Equality and Human Rights Commi ssion claims that there are 5,400 women â€Å"missing† from top jobs in the UK and the narrowing of the gender gap across business, politics and the media is â€Å"tortuously slow†. This report will review the current and historical research as to why women are not more prominent in leadership roles. Introduction Why is it important for women to be in leadership positions? Historically leadership positions have been male dominated.This is no surprise given that it was not until the Equal Franchise Act of 1928 that women over 21 were able to vote and finally achieve the same voting rights as men. The Equalities Act 2010 has created a unified public sector duty, which is intended to promote equality in public policy and decision-making. The Glass Ceiling â€Å"The glass ceiling† refers to a women's lack of advancement into leadership positions despite no visible barriers â€Å"You tend not to use your womanhood. You try to neutralize it. For example, you wear a s uit instead of a dress. † (Morrison, White, Velsor, and The Center For Creative Leadership 4)The Human Rights Commission’s research report titled ‘Sex and Power 2011’ looked at twenty seven occupational categories both in the private and public sectors and measured how many women held positions of power and influence. The research revealed that the position of women in high profile positions had changed little since a previous report in 2008 and that in 100 FTSE companies it would take some seventy years for women directors to equal men. This was also mirrored in relation to women MP’s in parliament. (Human Rights Commission, 2011) (Guardian Buisness Newspaper, Tuesday 13 September 2011 )Linder, K. 2012. , The Women of Berkshire Hathaway : Lessons from Warren Buffett's Female CEOs and Directors. [online]. Wiley. Available from: 25 November 2012 Zenger J and Folkman Jack Zenger They are co-authors of the October 2011 HBR article â€Å"Making Yourself Indispensable,† and the book How to Be Exceptional: Drive Leadership Success by Magnifying Your Strengths (McGraw-Hill, 2012). Publication information: Book title: Breaking the Glass Ceiling:Can Women Reach the Top of America's Largest Corporations?. Edition: Updated. Contributors: Ann M.Morrison – Author, Randall P. White – Author, Ellen Van Velsor – Author, The Center For Creative Leadership – OrganizationName. Publisher: Perseus Publishing. Place of publication: Cambridge, MA. Publication year: 1994. Page number: Not availableQuestia, a part of Gale, Cengage Learning. www. questia. com Publication information: Book title: Human Resources, Care Giving, Career Progression, and Gender: A Gender Neutral Glass Ceiling. Contributors: Beulah S. Coyne – Author, Edward J. Coyne – Author, Monica Lee – Author. Publisher: Routledge. Place of publication: New York. Publication year: 2004. Page number: xiii

Exchange Rate Risk And Impact On Foreign Trade - Free Essay Example

Sample details Pages: 18 Words: 5297 Downloads: 4 Date added: 2017/06/26 Category Economics Essay Type Research paper Did you like this example? This paper uses real world application of exchange rate fluctuations, its causes and impact on the economy, risks associated with it and their management, in terms of Chinese economy to show the importance on these financial concepts and their requirement of understanding one to understand the other, all in wake of gaining he knowledge that will help in making transactions decisions that affect the economy on a global scale. Going for a bigger leap by learning to take smaller steps. Introduction The incontrovertible evidence of understanding the importance of the exchange rate fluctuation mechanism and the types and magnitude of risk, attached to the international trading affecting those who are involved in transaction across border globally deems necessary the acquisition of knowledge by those who are involved in day to day market transactions. The global economy is reliant upon the study of economic and other socio-political variable affecting the exchange rate in the international market influence the terms of trade of the trading countries and consequently inducing changes in the budget restructuring and trading quantities that are contributed to the international market by individual countries. Thus the realization of the need for this paper came upon as a research topic. This report takes into account several articles and write ups related to foreign exchange rates, their risks, exposure, and tries to plug them in with the conventional concepts of these financial instruments in order to enhance the understanding and the knowledge of exchange rate mechanism, its determinants and how it impacts any countrys economy specifically that of china. The literature support backs up the implication of the concepts applied here for the better grasp if the points that are attempting to be made noticeable. The main theme of the paper revolves around the arena of foreign exchange rates; How they impact the economy, what causes them to fluctuate, the impact of these fluctuations; How they affect the country with a changing value of currency in relative terms, a mention of the recent effects that the economies of the countries have gone into having had been affected in terms of it economy and foreign trade sector, the risk exposure associated with the fluctuating exchange rates and how does hedging help in reducing that risk. Even though the main theme would give an impression of a broad topic discussion, however we will remain confined to narrowed dis cussion limited within our topics only touching the subject in light of its practical application extracted from evidence presented in news articles and periodicals. This stance has been adopted, induced by the goal achieving grasp on the concepts and not on mere conventional definitions to these applicable financial-economic concepts. The paper also sees through and explains the methods of conduction of research in terms of our sources of data and our approach. Graphs and charts relevant to the topic have been provided to further clear the ideas built upon the physical evidence by analysis of these statistical data sets. Eventually reaching to base where we design a cohesive note on the findings of all the efforts put into this research and thus helping us to reach to a conclusion based upon all the facts and evidence provided in the literature review and by the statistical data charts and graphs. Don’t waste time! Our writers will create an original "Exchange Rate Risk And Impact On Foreign Trade" essay for you Create order Literature Review This section imparts knowledge using empirical evidence that is published in newspaper journals and articles and is related to our topic of interest, to augment the understanding of the financial concepts and phenomena that take place in the economy. Following are some critical reviews of articles pertaining to topic: Exchange rate risk, determinants and its impact on foreign trade. Exchange Rate Fluctuations and its Causes. The issue of the undervalued currency of China (Renminbi).and not just undervalued the word substantial puts the emphasize on the meaning shedding curious gazes as to what might be the reason behind this, has been presented by the corporate author (Business Asia, 2007).However, the year 2007 and the year following that were expected to bring appreciation according to the author. The low valued currency helped in the exports volume increment but at the same time incurred costs in other sectors. The so expected appreciation would bring prosperity to the economy, indicating an economic growth or a path led to success. On the other hand, the appreciated currency would, by all means, even if little, impact the exporting sector negatively making the goods sold to foreign countries less cheaper and making the existence of Chinese goods in the competitive market all the more tougher (Business Asia, 2007). El-Erian, ONeill, Bergsten, Mohamed (2007), further takes the discussion forward with appreciating Chinese currency and at the same time the threat of protectionist trade measures and the falling dollar. He sheds light upon the problem of falling dollar and how it would be a problem being a constraint upon the Federal Reserve Bank to take measure against the economic down turns led by the crisis in the real estate. On the other hand, the Chinese Yuan has been allowed to appreciate modestly in the past two year from the time the article was written keeping an eye for the threat of protectionist measures (Business Asia, 2007). Already the appreciation had caused much apprehension for the Chinese; dollar falling further would be putting too much on their plate. The Depreciation of Dollar would imply further appreciation in Chinese currency which would threat the exports sector much. Nevertheless the depreciation of dollar by and large is a development for the world economy despite some negative consequences it may have on trade. And the circumstances are much more predictive for the weak dollar than the reality assumes, and it sure is likely to remain that way (El-Erian, ONeill, Bergsten, Mohamed, 2007). The important issues discussed by the corporate author diverts our attention towards the sterilization efforts, issuance of liabilities and Sino-US relation that are the main factors affecting the pace of the appreciation expected (Business Asia, 2007). The so long undervalued Chinese currencys expectation to rise was induced by the central banks intention of sterilization for the manipulation of exchange rate, however all depended upon the success of this effort. The central bank can control the exchange rate by buying or selling the currency and hence stimulation and increase or a decrease respectively in the relative supply of the currency in circulation. Furthermore in sterilizing it insulates itself from the foreign exchange operations in order to prevent potentially adverse impacts of capital inflow or outflow. Thus in order to appr eciate the Chinese Renminbi against US dollar the central bank of china would buy the domestic currency and create a shortage of supply, therefore increasing its value and it would sell the American dollar for the reverse effect. Hence, the Chinese currency would appreciate. (Business Asia, 2007) El-Erian (El-Erian, ONeill, Bergsten, Mohamed, 2007), taking a step further, reasoned the apprehensive condition of the Chinese, to see the falling dollar after all their efforts to keep the appreciation of their own currency modest. The threat of declining exports leading to broadening of trade balance was imminent. And to top it off the depreciating dollar only sought to be a cause for an augmentation of risk in the painstakingly controlled economy (El-Erian, ONeill, Bergsten, Mohamed, 2007). The article but also points out that despite the negative consequences of the weakening dollar on trade given the predictable circumstances of a likely depreciation, it also implies a developmen t of world economy against US. Because depreciation of dollar would in effect mean appreciation of the currencies that it must be held against which includes all the other countries of the world. Thus from the perspective of other countries an appreciation would be taking place implying a growth affect in their respective economies and indicating a surge of development in those countries (El-Erian, ONeill, Bergsten, Mohamed, 2007). The Negative and the Positive Impacts Corporate author contributed in the same line of argument, though his inclination was towards the impacts then cause. His argument is in resonance to the arguments of El-Erian critically analyzed above. The author specifically talks about the strong appreciation of most Asian currencies against USD while there being still others, which were weaker than they were before the global financial crisis (Business Asia, 2009). The appreciation of other currencies has put the undervalued currency under pressure to appreciate further. China in this respect has continued to keep its currency undervalued. A rapid appreciation would imply a slower accumulation of foreign reserves. This brings two aspects under concern. First is the rising threat of protectionism from European countries and the US and the other is the giving full control of monetary policy back to Government (Business Asia, 2009). The corporate author of Business Asia (Business Asia, 2009) also forces us to contemplate upon t he issue, which is the rapid appreciation of currencies in Asia, especially in China, who has been keeping a modest appreciation rate in light of the threat of protectionism from EU and US. The weaker currency if allowed to appreciate rapidly would instigate protectionism from EU and US on now not so cheap goods owing to the devaluation of USD itself as well as the appreciation Asian currencies. However this would also imply developmental growth in other countries (referring to China) relative to the US (Business Asia, 2007). Furthermore another incentive for letting the currency appreciate for China and other Asian countries would be that letting the exchange rate fluctuate on its own terms, the Government will finally be free to use the monetary instruments to manipulate and reshape their monetary policy which otherwise had been committed to keeping the exchange rate fluctuations in check (Business Asia, 2009). From the discussions regarding the exchange rate by different autho rs so far, it has been an enlightening experience to contemplate upon the issues faced in the real world by the real economies regarding the Foreign exchange rate fluctuations, how they are affected differently by the conditions of the economy in different countries, and the what reactions it induce in the effected economies. The Exchange rate fluctuation is now better understood in terms of two countries respected currency values. We can see a number of different impacting factors changing the rate which include the loosening of monetary policy in to let the Chinese currency appreciate against all currencies and on the other hand the devaluation of dollar appreciated the Chinese currency even further. Resultantly changing the relative development indicators of the countries effected (Business Asia, 2007). Furthermore, the effects on the foreign exchange rate we also saw the application of the effects that the fluctuations of FOREX have on the economies, which is an exposure to t he risk of losing trade as mentioned in our literature review (Business Asia, 2009). The rapidly increasing currency value also come forth rapidly rising prices of exports goods which would induce a fall in demand or worse, protectionist policies, in the importing countries for the exported goods of the country experiencing currency appreciation (Business Asia, 2007). Besides the risk of protectionism and other changing exchange rates negative impacts the positive impacts include in the likely situation of appreciation as mentioned above, loosening of control on exchange rates frees the monetary policy to concentrate on the other sectors of the economy. Also the appreciating value of the currency creates major attraction for short-term and high-return investment seekers (Huang, 2010). This can be explained better by Ying Huangs argument on the main reason of speculative fund inflow to China. Huang (2010) attempts to decipher the main reason for the inflow of funds into Chinese ec onomy. The massive overseas funds inflow, according to the author, is primarily due to the appreciation in the Chinese Currency which makes it attractive to investors. These funds aim to earn a higher comparative return on short term basis due to high interest rates offered in China as Opposed to that of the United States. And, although, the housing and the stock market appear to be the main attraction of investments since funds may appear to target investment in these markets, however, the attractive appreciating Chinese currency is the major reason of the speculative inflow of funds and not these markets (Huang, 2010). An appreciating value of Chinese currency shows promising future to the investors who seek high returns in a very short period. The reason being that, in spite of the high interest rates offered to the investors the appreciating value of currency increases the return by an even larger total than just with the high returns. The high returns and increasing value by the virtue of increasing Foreign exchange rate is major attraction for investors. The article pointed out the fact that even though the housing and stock market appear to be the investment targets reeling in the major influx of funds from overseas, however the main star of the speculative flow is the attractive currency of Chinese owing to its appreciating nature. The housing and stock market do not cause this major influx, however they do become the target investments eventually directly or indirectly (Huang, 2010). This pretty much elaborates our discussion on foreign exchange rate; however, we still need further evidence upon the risk exposures that have been mentioned as an effect to these fluctuations in terms of their impact on economy or investors and why or why not investors decide to take precautionary measures in taking shelters from this kind of risk exposure Risk Exposure- Avoid it or Avoid Avoiding it? A decent explanation can be induced by analyzing the perspective of Georgina Lee (Lee, 2009). Lee talks about the increased scrutiny that Chinese state owned businesses have to face now. The derivatives market used to hedge the investments against interest, currency and commodity risk are put under surveillance in order to put constraints on this phenomena and discourage these market transactions that would eventually lead to too much hedging that all the risk averse investors would start using these financial instrument to secure their investments. The State-owned Asset Supervision and Administration Commission was spurred into action after several State-owned Enterprises, their subsidiaries and affiliates suffered high losses due to failed foreign exchange, fuel and interest rate hedging contracts (Lee, 2009). Although, according to Georgina Lee, the use of derivate securities as financial instruments to hedge the investments against certain kind of risks may be a very attract ive phenomenon of wisely securing your assets against risk, but it brings forth the new kind of risk associated with it, that is the probability of losing profits in case unexpected adverse circumstances would come into play (Lee, 2009). The article discusses the new limitations and regulations put to scrutinize the state-owned businesses and restrain them from using derivative securities. After observing several high profile losses incurred to state-owned enterprises, the SASAC came into action to prevent further losses due to failed foreign exchange, interest and fuel hedging contracts (Lee, 2009). Lees discussion merely elaborates why Chinese Supervision Commission had to keep in check the derivative markets in order to prevent another experience like past of failed securities. However, it is more of a choice in other countries than of a legislative measure, which is made after analyzing the costs incurred in using the financial hedging instruments (Larry Kirschner, 2009). Larry Kirschner elaborates upon the Foreign Exchange Rate risk exposure and how and why different companies manipulate the financial derivatives as instrument to manage their risk. Also they write that a few companies would rather not address the foreign exchange risk exposure at all. According to the authors, it requires a great deal of understanding, assessment and prioritization of the exposures before they can apply these any hedging instrument to gain from such investments (Larry Kirschner, 2009).They observe that where many companies have become complacent with their foreign exchange risk management practices, there exist other companies that would rather condone addressing to such exposures. There are many things to consider and much effort required before utilizing any instrument to manage against such risk exposures (Larry Kirschner, 2009). The implication by the authors enlightens us about the importance of better understanding of the foreign exchange rate fluctuations and risk exposure before they can be manipulated into profit extraction or general hedging against an expected risk of adverse circumstances. The reason for some companies being comfortable with their hedging or risk management practices stands that they understand the further risks attached to it and after having properly assessed, analyzed and derived from the given risks and they have weighed their expectations of gains with current condoning alternative and have reached to a conclusion to generate expectations of comparatively more gains through hedging (Larry Kirschner, 2009). These preliminary requirements are basic necessity and incur some cost as well which discourages other companies from using financial instrument to their own advantage. Thus it can be derived that although risk exposure management may be beneficial for companies to hedge against exchange rate risk, however, it requires careful analysis of international exposures with due consideration given to internal co ntrol by the companies (Larry Kirschner, 2009). The analysis above provides quite an insight on the choices faced by the investors and the reason why they chose to or chose not to use financial derivatives to hedge against the foreign risk. At the end it all depends of your weighted analysis of cost and benefits and risk involved that contribute in the final decision making process (Larry Kirschner, 2009). Despite all these discussions we know from intuition that we as humans would prefer lesser risk. Putting this natural instinct upon financial intuition it should be an understood fact that investors would go for a stable investment of low risk provided he choice is a decision made after thorough analytical efforts. However in light of all the above analysis and our major intuition we should see that due to the depreciating dollar value, many countries investors should have switched to a more stable currency as a reserve currency but we observe that dollar still remains to be th e reserve currency all over uncontested with the exception of the challenging statement delivered by Governor of Peoples bank of China (Montecillo, 2009). Montecillo (2009) reflects the view of the Governor of Peopleà ¢Ã¢â€š ¬Ã¢â€ž ¢s Bank of China, Zhou Xiao Chan, that current global financial system faces vulnerability and systematic risks. He also emphasized that reform must create an international reserve currency with stable value, rule based issuance and manageable supply. The article further illustrates on the point made that they are serving as a à ¢Ã¢â€š ¬Ã…“unit of accountà ¢Ã¢â€š ¬? and as a à ¢Ã¢â€š ¬Ã…“medium of exchangeà ¢Ã¢â€š ¬?. Moreover its à ¢Ã¢â€š ¬Ã…“store of valueà ¢Ã¢â€š ¬? is also considered from the perspective of both the government and the private sectors. Following the perspective Governor of peopleà ¢Ã¢â€š ¬Ã¢â€ž ¢s Bank of China actually challenged the statement of BSP(the Bangko Sentralng Pilipinas ) that despite declining value of dol lar (from 72.7% in end- June2001 to 62.8% as of end- June 2009: the article quotes) dollar will remain the world most widely used currency-Uncontested reserve currency- as no alternative existed as then (Montecillo, 2009). Another type of risk associated with the foreign exchange rate fluctuation has been thoroughly highlighted in this article enlightened by the challenging statement of Governor of Peopleà ¢Ã¢â€š ¬Ã¢â€ž ¢s Bank of China. With the declining value of dollar with respect to other currencies, in effect appreciating them against the USD, the risk associated with them puts the investors in reserve currency at exposure (Montecillo, 2009). The stable foreign reserve currency is the requirement for foreign transactions and for investment purposes. However, a fluctuating reserve currency would create imbalance of gains and losses and putting the market players at a high risk of losing money who have invested in a currency with declining value, for example, and need to pay in other currency that would have appreciated against the reserve currency in effect. Thus the declining value of Dollar though may not have challenged its world-wide demand as a reserve currency, but China has contested that perspective in term of demanding a relatively stable alternative and seek shelter from the exposure this foreign exchange rate fluctuation risk (Montecillo, 2009). Data Analysis Figure 1: Foreign Direct Investment in China Untitled.png (The World Bank, 2010) The figure shows foreign direct investment in China which is increasing over the period at an increasing rate (The World Bank, 2010). The reason can be explained as an induction due to attraction of high interest rates and constantly increasing value of Chinese currency (Huang, 2010). The appreciating Chinese currency is a major attraction for short term foreign investors seeking high returns on their investments. Thus, the increase in the foreign direct investment can be justified by the increase in the Chinese currency against other currencies and also the deprecation of dollar against Asian currencies (Business Asia, 2009). Figure 2: Growth in Money Supply (percentage change) Untitled2.png (The World Bank, 2010) The increase in the money supply can be seen as an effort to prevent the adverse consequences expected to be brought up by the simultaneous increase in the value of Chin ese Currency against US dollar and the Depreciation of US dollar against Asian currencies (Business Asia, 2009). it is only by selling out domestic currency and buying the foreign currency, that the central bank of china would be able to keep the demand for Chinese currency low and hence low value and keep the foreign reserves high to keep the foreign currency to depreciate against their own currency to avoid the risk of protectionism (Business Asia, 2007). The Foreign reserves record can be observed in figure 2. Figure 3: Chinas Foreign Reserves (includes Gold, Current US$) Untitled3.png (The World bank, 2010) The figure above shows the increase in the foreign reserve currency ( US dollars) which further supports our claim of China having had used protective measure to keep the appreciation of its currency modest by buying in foreign reserves and selling our domestic currency (The World Bank, 2010). Clearly these efforts have been put into play after 2004 since the fore ign direct investment had a peaking high rate of increment till that year as can be observed in the Figure 1 (The World Bank, 2010). And since the value of currency has been attempted to put under control, the threat of protectionist policies against Chinese exports receded as he prices of exports against started to fall as can be observed in the figure 3 (The World bank, 2010). Figure 4: USD-CNY Untitled.png (Yahoo, 2010) We see the appreciating Chinese currency against USD but till 2005 mid a very stable exchange rate points towards the mentioned efforts on behalf of Chinese government by manipulating the money supply to keep the Foreign exchange rate from appreciating (The World Bank, 2010). However, during the period of constant exchange rate or say merely constant keeping a moderate change allowed, the currency did come under pressure (Business Asia, 2009) for its own increasing value to be taken care of while also managing the impact of depreciation of dollar on th e Chinese currency and eventually its exports (Business Asia, 2007). After 2006 the monetary policy seems to have been allowed to let lose the exchange rate to be able to concentrate on the other sectors as well (Business Asia, 2007). Methodology The way to go about the research conducted for this term paper is known as the methodology. The method pursued in gathering the required material and data for the paper comprises mostly follows a general type in terms of the form and efforts put in to acquire it. There are majorly three type data sources used for research reports or gathering relevant data on the topic of interest (Lombard, 2010).But our concern is with the Secondary Research or Data Collection method. This includes data and observational facts as already recorded by previous researchers. The provided datasets have already been analyzed and shaped before by previous writers and authors with copyrights protecting their work. The material from the secondary source is further manipulated and used to assist in making points of information with proper referencing and credits paid to the original workers. As readily available data sets they are a persons prior choice to any other method. Some negative aspects, however , are associated with the Secondary data sets as well. Despite the time saving and cost saving features of Secondary data sets, there is no guarantee of them meeting the exact requirements of the researcher seeking evidence to support his theories or claims. Furthermore the validity and reliability of the researched data sets may be in question and source can project dubious impressions unless the researches are conducted by reliable sources as government agencies (Lombard, 2010) Purpose of Research The purpose of research is to help make the understanding of concepts of foreign exchange rate fluctuations. and its causes and effects and the hedging and investment against these fluctuations easy in light of evidence from Chinese currency revaluation against US Dollars, the investment it induced, and the negative and the positive aspects of the Chinese currency revaluation. Research Approach and Strategy Given the purpose of the research and the types of the research explained it comes down to putting it down to defining our Strategy and deciding which approach to adopt (Lombard, 2010). Bearing in mind the scale and the scope of our topic and the limited resources, the best and most efficient approach for us to have, which we adopted, is to gather data from secondary research source upon the evidence of Chinese economy to explain the different aspects of the foreign exchange rate role in the economy. All our research material refers to a secondary data source, which consists of point of views of different authors publishing their research or findings in articles appearing in periodicals. Our strategy remains to manipulate this secondary source material and mold them to help up support our own claims and concepts without changing the main framework and the meaning of ideas associated with the empirical evidence. This approach not only proved the strategy to be cost effective but also very efficient in term of time saving and with proper citation the sources can tracked back to authenticate their reliability and validity. Data Collection and Analysis Provided with the theoretical concepts from different authors point of views (referring to the Literature review), relevant data including charts/data sets recording foreign exchange rate fluctuations in Chinese currency against US Dollar and its induction of investment and other impacts are provided in the section covering statistical data for better analysis of our concepts in view of empirical evidence. Findings The course of writing this term paper has helped us find and clear quite a few things which need to be summarized in this section. The findings of this research includes the following important concepts Foreign Exchange Rate Fluctuations and Causes Chinas Foreign exchange rate had been increasing moderately owing to their controlled efforts. The efforts of controlling the exchange rate from fluctuating was in line due to risk of protectionist policies against Chinese exports from EU and US countries because of rapidly increasing value of currency relative to other currencies (Business Asia, 2007). Also there was pressure due to depreciating value of dollar against the Asian currencies which made matters worse and the need for control bigger. The foreign exchange rate was stabilized by diverting monetary policy into manipulating the money supply accordingly to set the foreign exchange rate at fixed level (El-Erian, ONeill, Bergsten, Mohamed, 2007). Besides the threat of protectionism there was also a positive impact of being included under the impression of having hit a developmental hike. Foreign Exchange Rate Risk and its Management The exchange rate fluctuations bring about its own pros and cons. In the case of china, the appreciating value of Chinese currency brought about major investment incentives and a major attraction for short term high return seeking investors (Huang, 2010). And with investment opportunities come forth the risk associated with these investments and its management (Lee, 2009) which in turn brings forth more risks of losing money by using investment derivatives without proper calculation of risk involved in the investment related to the exchange rate fluctuation and correctly predicting FOREX forecast. It is very important to first analyze the risks associated before deciding whether or not to hedge against it or if it is even worth hedging against (Lee, 2009). Anomalies Despite what we expect based upon our calculative procedure of forecasting and weighting and comparing alternatives, there is always a chance for an anomaly to exist within all kinds circumstances. With all our observation of increasing Chinese currency value and dollar being instable, we would have expected the world to shift to a more stable and risk free currency as their reserve currency. However, we see that with the exception of challenging statement from the governor of Peoples Bank of China, Dollar remains as the reserve currency of most of the countries uncontested (Montecillo, 2009). Conclusion We conclude our term paper with summarizing the findings during the course of our research and finally stating the end result to what our findings led us to extract as our conclusion. We found that Fluctuating exchange rates have impacts, both positive and negative on, on different sectors of the economy, especially trade and investment. We also found that investment brings along a lot of risks and it requires a very careful and analyzed decision whether to hedge against these risk or not and using which derivative. We learned that despite our careful calculations, not everything works out according to our predictions and there is always some chance of error in calculations or an unpredictable situation taking over. The reason for slow appreciation in Chinese Currency against other currency, especially US Dollar, in the first half of the current decade can be credited to the efforts put in to keep the exchange rate from appreciating, which projected a threat of protectionist pol icies from trading partners against the Chinese exports that were becoming less cheap (Business Asia, 2007). The, efforts however, involved binding the monetary policy to exchange rate fluctuations and keep it from being used for other sectors. On the other hand, if the Chinese had let the exchange rate fluctuate freely, it would free the monetary policy for other sectors. The Chinese Currency would have appreciated rapidly due to its own currency pressure and also because of depreciating US Dollar against the Asian currencies (Business Asia, 2009). The rapidly increasing value of Chinese Currency would make the exports costly to foreign consumers and hence China would face protectionist policies from importing countries. The appreciating currency would also be an implication of China being on a developmental hike since its currency is appreciating (Business Asia, 2007). It also induces high fund inflow for investors who seek greater returns in shorter period time by benefiting f rom both, the high interest rates in the Chinese economy and the appreciating Chinese currency (Huang, 2010). The investment in the foreign exchange market further has certain risks associated with it. The Derivatives market securities are the financial instruments used to hedge against these risk but then again lack of knowledge would lead to more lasses than gains as in China after which they had to control the Derivative markets to limit and prevent the losses that had been incurred once already (Lee, 2009). The use of derivatives market require, Thus, a calculated and weighted analysis of the situations and forecasts before using them to hedge a any risk on investment. All this bother, becomes the reason for some companies to decide not to hedge or just condone the option for it requires more effort than the worthy output (Larry Kirschner, 2009). All the hassle and the imbalance of trade would create more problems than projecting indication of economic growth. So in order to prevent the imbalance in trade china kept the currency from appreciating by manipulating the money supply i.e. increasing supply of domestic currency and buying all the foreign reserves. Nevertheless, the falling value of Dollar instigated challenging statement from China on the importance of shifting to a more stable currency as foreign reserves despite the world wide uncontested resilience of dollar as the reserve currency even with the instability in the exchange rate (Montecillo, 2009).