Currency futures contracts are traded on organized exchanges. Suppose you sell a contract on Australian dollars in the amount of A$100,000 on the Chicago Mercantile Exchange at $0.7900/A$. Upon maturity of the contract, the futures price is $0.7500/A$. a. Have you made money or lost money? How much have you made or lost? b
As part of its international expansion program, Acme, a U.S. multinational enterprise (MNE), is currently in the planning stages of establishing a greenfield (see text glossary for definition) production facility overseas. You have been asked to present a proposal to the steering committee comparing the advantages and disadvanta
Identify potential domestic and international sources of financing for your global venture project. Examine the role of external governance and its impact to the organization. Describe the degree to which your organization will operate as a Centralized versus Decentralized Organization. Include a suggested organizational
I have completed most of the other parts, but need help on the two questions below. I have attached an instructional sheet. The only questions I need help with are highlighted in the instructional sheet. 1. Determine potential domestic and international sources of financing to open a business to distribute medicine in Bot
What does corporate governance mean? What is the role of the Board of Directors in a corporation? Based on research, give a real-world example of issues facing a board of directors. Supplemented with extra information on corporate governance and the role of the board of directors.
1. What are the ramifications if one or more of your projections/forecasts do not hold true? What will you do if, during implementation, you find that you overstated or understated your projections? 2. How does sensitivity analysis relate to contingency planning? What are a couple risk mitigation strategies that you could
Euro Currency Markets . Describe your selected topic, how it is used in global financing operations, and its importance in managing risks. Use at least three sources.
Using Coca-Cola, and Pepsi-Cola: a. Describe and quantify the elements of working capital for the most recent fiscal year for Coca-Cola and Pepsi-Cola. b. Explain the functions of intermediaries and financial regulatory bodies with both companies. c. Determine the importance of control programs and effective internal contro
1. What are the primary forms of export financing? What steps are involved in each form of international financing? What are the advantages and disadvantages of each form? 3. Select two major currencies of the past year. What are the similarities and differences between your selected currencies? What have been the drive
If the current exchange rate is $1.75/pound, the one-year forward exchange rate is $1.85/pound, and the interest rate on British government bills is 8% per year, what risk-free, dollar-denominated return can be locked in by investing in the British bills?
1. Describe and quantify the elements of working capital for the 2006 fiscal year for both the Walt Disney Company and Apple. 2. Explain the functions of intermediaries and financial regulatory bodies within the companies. 3. Determine the importance of control programs and effective internal control techniques to these orga
1) What are unique risks associated with foreign investments? How might an investor protect his/her portfolio against these risks? Is it possible to protect a portfolio from all types of risk? Explain your answer. 2) Does international diversification enhance risk reduction? Why or why not? What measures can be taken to reduc
Define the term convertible currency and identify them.
You work for a large investment firm and recently wrote a position article on your firm's approach to investing for the small investor, titled "Investing is for the little guy". The article now appears on your company's website. It has, interestingly enough, generated e-mailed responses from potential clients and your firm is as
3. Explain how a firm's management can limit risk exposure through using a forward contract. What types of forward contracts are available? 5. How do managers use futures contracts to limit risk exposure?
Reparations payments by Germany required under the Treaty of Versailles posed a problem. How were tax payments by German citizens to their government in German marks to be converted to dollar payments to United States lenders? Explain how these transfers might have been successfully carried out. Why was Germany unable to make th
1- Even if production costs are higher in a foreign country, a U.S. firm may establish a manufacturing plant in the foreign country now if: A) the host government of that country eliminates all quotas. B) the host government of that country reduces all quotas. C) the host government of that country increases all quotas.
Can someone with knowledge in International Financial management help with the following problem: Bullock Corporation invests 1,500,000 South African rand at a nominal interest rate of 10%. At the time the investment is made, the spot rate of the rand is $.205. If the spot rate of the rand at maturity of the investment is $.2
A. Analyze the effects of international portfolio diversification on an investment portfolio b. Examine alternative investment vehicles. c. Explain how the use of derivative securities can further enhance a portfolio's performance
What role(s) do financial institutions play in financial intermediation, why are these roles necessary, and how does the company need to respond to the increased intermediation scrutiny due to the company IPO?
"There are flexible (floating) and fixed exchange-rate systems that nations use to correct imbalances in the balance of payments. When a nation has a payment deficit foreign exchange rates will increase, thus making foreign goods and services more expensive and decreasing imports. These events will make a nation's goods and se
1. Rolls-Royce, the British jet engine manufacturer, sells engines to U.S. airlines and buys parts from U.S. companies. Suppose it has accounts receivable of $1.5 billion and accounts payable of $740 million. It also borrowed $600 million. The current spot rate is $1.512/pound. a. What is Rolls-Royce's dollar transaction ex
**** Consolidated Exposur: Quincy Corp. estimates the following cash flows in 90 days at its subsidiaries as follows: Net Position in Each Currency Measured in the Parent's Currency (in 1000s of units) Subsidiary Currency 1 Currency 2 Currency 3 A +200 -300 -100 B +100 -40 -10 C -180 +200 -40 Determ
1. Imagine that Canada, the United States and Mexico decide to adopt a fixed exchange rate system. What would be the likely consequences of such a system for (a) international business and (b) the flow of trade and investment among the three countries? 2. Why has the global capital market grown so rapidly in recent decades? D
What are the differences between traditional and derivative instruments? Why do companies use derivative instruments? Are derivatives a good investment? Why or why not?
How does double taxation of corporate income occur?
In 2003, I deposited $10,000 into a Swiss bank account I have had since I worked in Geneva in the 1970s. ($10,000 is the limit that Americans can wire in one transaction to an overseas location) At the time (2003) the dollar was strong....the ratio to the Euro was about .91. What is it today? What is the $10,000 w
Marketing managers feel it is first important to get an idea of the climate in the country towards foreign trade and investment. Analyze (Thailand) its trade policies as to how they promote and/or restrict international trade. Determine whether these policies include any of the following: Subsidies, export financing, foreig
1. Suppose that you buy a cap and write a floor, with the same strike rate, maturity, notional principal, et cetera. Suppose that the values of the two options are equal. What derivative instrument have you created synthetically? Are you long or short this instrument? 2. The six-month s.a. $LIBOR is 5.00%, and the one-year s.
Your hometown newspaper needs someone to write an informative article on large scale economic issues. The reporter who spoke with you before thinks of you, welcomes you home, and requests another article. The attached document named BOB is a summary of disaggregated data drawn from information provided on the 2000 U.S. balance