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Foreign Exchange Rates

Advantages of Manufacturing in Canada

Smitheford Pharmaceuticals was founded by a former officer in the Civil War, General Robert Smitheford, in 1878. He moved his family to Colorado Springs to aid in his wife's tuberculosis condition. At the time, it was believed that the sunshine and high altitude had curative effects. The company quickly grew and expanded. To

China's Managed Float

China's Managed Float Read the case and answer the questions at the end of the case. Use one outside reference in APA style.

The Importance of Purchasing Power Parity

Mini Case: Turkish Lira and the Purchasing Power Parity Veritas Emerging Market Fund specializes in investing in emerging stock markets of the world. Mr. Henry Mobaus, an experienced hand in international investment and your boss, is currently interested in Turkish stock markets. He thinks that Turkey will eventually be invit

Made in the U.S.A.-Dumped in Brazil, Africa, Iraq

Discussion questions: Remember: Non-moral questions include matters of fact. 1. Complete the following statements by filling in the blanks with either "moral" or "non-moral." Transfer the answered question to your paper. a. Whether or not dumping should be permitted is a question. b. Are dangerous products of any use in

Translation, Transaction and Economic Exposure

What are the different issues involved with translation exposure, transaction exposure and economic exposure? How can companies plan to mitigate the risk of each? What are the opportunity costs associated with measures to mitigate this risk?

Manipulating Currency & Exchange-Rate Systems

Hi, Need help with this: - Describe briefly the advantages and disadvantages of i) the floating and ii) the fixed exchange-rate systems. Which do you think the world will move toward in the future? - China is seen as a fixed-rate regime, and was even an issue in the last Presidential election (see

Exchange Rate Fluctuations and Translation methods

Other than the exchange rate fluctuations, what risks do you think impact multinationals today as the world attempts to pull out of the current recession? The translation methods allowed under FAS No. 52 is current rate method and temporal method. How are they different? Which is better? Should there be more than one and why

Currency Transaction Exposure

Please assist with understanding what factors affect a firm's degree of transaction exposure in a particular currency? For those factors, what are the desirable characteristics that would reduce transaction exposure. Additionally, explain how a U.S. corporation could hedge net receivables in Malaysian ringgit with a forw

A Discussion On IPOs, Acquisitions, Mergers

Case: This is a privately held company, a Fortune 1000 enterprise with revenues in excess of 1 billion dollars, and an industry leader in the field of plastic injection molding. Its headquarters is in San Jose, there are 2 plants in the USA, and 1 in China. The company wants to expand its operation. The company is faced with thr

Hedge accounting, Foreign Currency and Derivatives.

1. A foreign currency transaction gain will be recognized by a U.S. company when it has a receivable from a foreign company a. denominated in dollars and the foreign currency weakens relative to the dollar before payment is received. b. denominated in foreign currency and the foreign currency strengthens relative to the dolla

Valuation Of The Yuan

In the news recently, there has been a great deal of talk about the subject of the valuation of the renminbi (yuan). What is all the fuss about and how does it impact the US and Chinese trade?

Funds, Shares, Exchange Rates

Quincy has recently been hired by an international investment firm that has offices in both London and New York. His boss has asked that he look into investing some of the firm's U.S.-based funds into a British company that currently sells at 80 pounds sterling (GBP) per share. Quincy's boss has limited his investable funds in

Trading in Foreign Exchange Analysis

I need help analyzing about "Trading in Foreign Exchange"! What does it mean when someone say's I'm "Trading in Foreign Exchange"? What's the benefit of Trading in Foreign Exchange? Why companies Trade in Foreign Exchange? What are some of the advantages/disadvantages about Trading in Foreign Exchange?

Exchange Rates and Purchasing Power Parity

P19-1: EXCHANGE RATE If British pounds sell for $1.64 (U.S.) per pound, what should dollar sell for in pounds per dollar? P19-2: CROSS RATE A currency trader observes that in the spot exchange market, 1 U.S. dollar can be exchanged for 3.50 Israeli shekels or for 77 Japanese yen. What is the cross-exchange rate between the ye

SFAS 8 versus SFAS 52

SFAS 8 established guidance for foreign currency translation accounting. Due to opposition to SFAS 8, further guidance was provided by SFAS 52. Why would multinational companies oppose the guidance provided in SFAS 8? Does SFAS 52 address the concerns with SFAS 8?

Foreign Exchange and Investment Decisions

Question: There has been huge growth in foreign exchange investment of average investors, for example, stay at home or working from home moms. Discuss 3 to 5 major factors which need to be considered in making foreign exchange (currency) investment decisions and why.

International Financial System

I am working on my masters and need assistance with the following questions: 1) Some people are arguing that the Chinese Yuan Renminbi (CNY) could take over the US dollar and the Renminbi will become the next reserve currency. Please read the following articles: Frankel, J. (2011). The rise of the Renminbi as international

Corporate Finance: Value, Exercise Price and Exchange Rate

PROBLEM 1: Net Worth $16,500 Long-term Debt $7,800 Net Working Capital (Excluding Cash) $1,900 Fixed Assets $20,700 Current Liabilities $2,750 Cash = Net Working Capital (Including Cash) = Current Assets = PROBLEM 2: # of shares outstanding 450,000 Current Stock Price $90 # of new shares outstandin

Translation of Foreign Currencies

All asset and liability accounts of foreign subsidiaries and affiliates are translated into Japanese yen at approximate year-end current exchange rates and all income and expense accounts are translated at exchange rates that approximate those rates prevailing at the time of the transactions. The resulting translation adjustment

Spot and Forward Prices

A. Illustrate the concept of "Spot-Forward pricing parity" relationship with a numerical example. B. What are the implications of this for Foreign Exchange Market?

Risk Proposal for Investment

Your corporation has an opportunity to make a major investment in China of $100 million to develop an offshore manufacturing facility. When this plant is fully developed and becomes operational in two years the corporation can close down its current manufacturing facility in the United States and shift operations to China. At pr

specific tools to reduce exchange rate risk

At the next finance department staff meeting, the CFO asked you to lead a discussion on the use of one specific tool to reduce exchange rate risk?a currency swap (The others are forward contracts and futures contracts.). He asked you to cover the following questions: -What would be a typical example where your company engaged

Suppose you are offered a savings account with an annual percentage rate of 4%

Suppose you are offered a savings account with an annual percentage rate of 4%. The effective annual rate will be? Suppose you invest in property with a perpetual cash flow. At the end of the first year you will receive $100 but the return will fall by 5% a year so that the second year's payment will be $95. If this 5% declin

Predicting Exchange Rates

Dorchester Inc. has asked you to help forecast exchange rates for the three potential countries you have selected for your proposal. First plot exchange rates from the past year and try to identify patterns that can be projected into the future. What exchange rates do you predict for 1 year from now? 1. China 2. Malaysia

Journal Entries for Foreign Transactions

USA Posh Puppies has the following foreign transactions during 20X8: -USA Posh Puppies purchased 10,000 collars on December 2 from Bling and Things, Inc., a firm based in Mexico, at an invoice price of 7,500 pesos. The pot rate was $0.064. Payment is due January 2, 20X9 -USA Posh Puppies sold 1,000 rhinestone-studded collars

What is the impact on importers to the U.S. from the EU?

If the exchange rate of the dollar and the Euro goes from one Euro equals $1.42 cents in 2011 to one Euro equals $1.30 in 2012, has the dollar strengthened or weakened and why? If this happens, what is the impact on importers to the U.S. from the EU and on exporters from the U.S. to the EU?