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Foreign Exchange Rates

Foreign Currency and Nike Case Study

Since Nike has international business in numerous countries, it closely monitors exchange rate movements. In particular, Nike has major business in Japan and in the United Kingdom. It has even begun to sell its shoes in Eastern European countries. Nike recognizes that it must monitor movements in currencies that were not allowed

Fisher Effect Mechanics & Exchange Rate Fluctuations

Please provide me assistance with an explanation of the Fisher effect, its mechanics, and how it can be applied in the hypothetical situation below. Also please explain how implications of exchange rate fluctuations as they relate to marketing and production decisions. You are asked to help put together a training program des

Gandor Company: should the company participate in joint venture with Chinese firm?

Gandor Co. is a U.S. firm that is considering a joint venture with a Chinese firm to produce and sell videocassettes. Gandor will invest $12 million in this project which will help to finance the Chinese firm's production. For each of the first 3 years, 50 percent of total profits will be distributed to the Chinese firm, while t

Hypothetically, what is the theoretical future price of EUR:USD, which will mature in 2 yrs in the future? Now suppose the EUR:USD future contract mature in 2 yrs is currently traded at 1.45:1 in futures market, what should you do to arbitrage?

Suppose you are trading Forex (Foreign exchange) now, and the spot price is EUR:USD=1.40:1. The risk free rate of EUR is 3% while risk free rate of USD is 1% (a) Hypothetically, what is the theoretical future price of EUR:USD, which will mature in 2 yrs in the future? (b) Now suppose the EUR:USD future contract mature in

US and Canada Spot and Forex Rates

The spot exchange rate for the Canadian dollar is Can $1.26 and the 6month forward rate is Can $1.22. Which is worth more, the U.S. Dollar, or the Canadian Dollar? Assuming absolute PPP holds, what is the cost in the U.S. of an Elkhead Beer if the price in Canada is Can $2.19? Why might the beer actually sell at a differe

Global Financing and Exchange Rate Mechanisms

Prepare a 800-1,000-word paper in which you analyze one of the following global financing and exchange rate topics: 1) Purchasing Power Parity/"Big Mac Index" Select a particular country, and a particular industry, Describe Purchasing Power Parity/"Big Mac Index", how it is used in global financing operations, and its impo

Study analysis of the Blades, Inc.

See attached file for full problem. Prepare a case study analysis of the Blades, Inc. 1. Explain factors that affect foreign exchange rates. 2. Summarize the case and answer questions 1-6.

Foreign Exchange and Derivatives Markets

I need help on this assignment. I have to answers the following questions based on a chosen senario. The selected scenario is : A manufacturing organization considering expansion to India or Brazil 1. What are implications of the absence or presence of a forward exchange market? 2. Does interest rate parity hold? Wh

MCQ: Business combinations, major customer, foreign currencies

#3. Principles for allocating the cost of a business combination re provided in SFAS 141, "Business Combinations.: When the fair value of a net assets acquired exceeds the total cost of the investment, the difference should be: a. Applied pro rata to reduce, but not below zero, the amounts initially assigned to specific no

International Business: Import & Export Product, Exchange Rates

You are the international manager of a US business that has just invented a revolutionary new personal computer that can perform the same functions as PCs, but costs only half as much to manufacture. Your CEO has asked you to decide how to expand into the European Union market. Your options are to export from the United States t

Finances and Currency Exchange Rates

1. Under the parent company concept, which of the following statements is true? A) Holding control of a subsidiary provides the parent with an indivisible interest in that company. B) Consolidated financial statements are produced primarily for the benefit of the parent company stockholders. C) The parent company concept i

Revaluation of the Yuan

From the perspective Chinese government should they accelerate an upward revaluaton of the Yuan (Renminbi)? Yes or no and why.

Solution to "Global Business Environment" question

Prepare a 700 word paper in which you conduct a country risk analysis for your selected global business venture (SEELING BOOKS IN BRAZIL). Analyze the following risks in your paper: o Political, legal, and regulatory risks o Exchange and repatriation of funds risks o Competitive risk assessment o Taxation and

Ch 17: Exchange Rates, spot prices, indirect quotes, arbitrage, cross rates

Please find the information in the attachment. Show all formulas and calculations and send in a word or excel document. 17-1. (Spot exchange rates) An American business needs to pay (a) 10,000 Canadian dollars, (b) 2 million yen, and (c) 50,000 Swiss francs to businesses abroad. What are the dollar payments to the respecti

Swap Contracts to Eliminate Currency Risk

Suppose you are a consultant living in the United States and have been engaged by a French company to perform a market study, which should take 18 monthes to complete. They are planning to pay you 100,000 francs monthly. The current exchange rate is $0.20 per franc. You are concerned that the French Franc will strengthen versus

Financing Foreign Operations: United Airlines in Japan with yen debt

United Airlines recently inaugurated service to Japan and now wants to finance the purchase of Boeing 747s to service that route. The CFO for United is attracted to yen financing because the interest rate on yen is 300 basis points lower than the dollar interest rate. Although he doesn't expect this interest differential to be o

Assuming a forward contract was not entered into, what would be the net impact on Car Corp.'s 2006 income statement related to this transaction? Assuming a forward contract was entered into, what would be the net impact on Car Corp.'s 2006 income statement related to this transaction?

Car Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2006, with payment of 10 million Korean won to be received on January 15, 2007. The following exchange rates applied: Date Spot Rate Forward Rate to Jan 15th Dec 16/06 $.00090 $.00098 Dec 31/06

Forecasting Exchange Rate

Blade Inc, is U.S Based manufacturer of roller blade, has 3 years contract to export to Thailand. Blades will also import certain component from Thailand (10 PCT OF REVENUE IS GENERATED FROM THAILAND, 10 PCT OF ITS COST IS GOODS SOLD IN THAILAND).Economic conditions in Thailand is being unfavorable. The technical forecast indica

Asset Classes (TD Ameritrade and the Dow 30)

Asset Classes are new & quite confusing to me. I have to write an 800 word essay which I determine the asset classes for the mutual fund - TD Ameritrade and the Dow 30 organization - Wal-Mart. In the paper, I must also explain how classifications of TD Ameritrade mutual fund, Wal-Mart, and the current investment environment impa

An American business pays $10,000, $15,000, and $20,000 to suppliers in, respectively, Japan, Switzerland, and Canada. How much, in local currencies, do the suppliers receive? Set up an arbitrage scheme with your capital. What is the gain (loss) in dollars?

Country Contract $/Foreign Currency Canada-dollar Spot .8437 30-day .8417 90-day .8395 Japan-yen Spot .004684 30-day .004717 90-day .004781 Switzerland Spot .5139 30-day .5169 90-day .5315 Question 1. (Spot exchange rates) An American business pays $10,000, $15,000, and $20,000 to suppliers in, respect

Exchange rate: pesos and dollar

Please see below for the solution on a question regarding foreign exchange rates - pesos and dollars in this case. Provide step by step calculations and detailed explanations. Currently, in the spot market $1 = 106.5 Japanese yen, 1 Japanese yen = 0.0096 euro, and 1 euro = 10.1 Mexican pesos. What is the exchange rate betwee

Tangshan Mining Company to choose optimal capital structure

1. Tangshan Mining Company must choose its optimal capital structure. Currently, the firm has a 40 percent debt ratio and the firm expects to generate a dividend next year of $4.89 per share and dividends are grow at a constant rate of 5 percent for the foreseeable future. Stockholders currently require a 10.89 percent return on

Foreign Exchange and Derivatives

Analyze the impact of the foreign exchange and derivatives markets on Honeywell Inc. and the countries (India and Brazil)in which the Honeywell Inc. is considering expansion. Specifically, describe the impact of exchange rate convertibility, bid-ask spreads, real exchange rates, and the interest rate parity on the relative inves

Questions Based on Business Combinations

1. Which of the following is not a cost that is typically incurred as part of a business combination: a. Direct Costs b. Research & Development Costs c. Cost of Issuing Securities d. Indirect & General Costs e. None of the above Questions 2&3 refer to the following: Assume that P Company purchases 10 percent of S Co

Managing Currency Risk for General Gadget's coconut scrapers

General Gadget Corp. (GGC) is a U.S.-based multinational firm that makes electrical coconut scrapers. These gadgets are made only in the United States using local inputs. The scrapers are sold mainly to Asian and West Indian countries where coconuts are grown. a. If GGC sells scrapers in Trinidad, what is the currency risk fa

Taft Company Acquiring the Assets of Vikix, Inc.

On January 1, 20X5, Taft Company acquired all of the outstanding stock of Vikix, Inc., a Norwegian company at a cost of $151,200. Vikix's net assets on the date of acquisition were 700,000 kroner (NKr). On January 1, 20X5, the book and fair values of the Norwegian subsidiary's identifiable assets and liabilities approximated the