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    International Finance

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    Probability Distribution of Forecasts

    1. Probability Distribution of Forecasts. Assume that the following regression model was applied to historical quarterly data: et = a0 + a1INTt + a2INFt 1 + *t where et = percentage change in the exchange rate of the Japanese yen in period t INTt = average real interest rate differ¬ential (U.S. interest rate m

    Exchange Rate Free Options

    (a) An Australian firm sold a ship to a Swiss firm and gave the Swiss client a choice of paying either AUS10,000 or SF15,000 in nine months. (i) In the above example, the Australian firm effectively gave the Swiss client a free option to buy up to AUS10,000 using Swiss francs. What is the 'implied' exercise exchange rate?

    Action Plan for the Indonesian firm Memo to the CEO

    Forest fires in SE Asia have destroyed your manufacturing facility in Indonesia. The loss of this facility has reduced your production capacity in Asia by 30-35%. Your entire financial loss for the PP&E ($12.8M) is covered by your property insurance and your Insurance against the risk of loss due to an inability to conduct busin

    Comprehensive income, classifications of net income

    FASB Accounting Standards Codification. Using the codification research system prepare responses to the following: Provide codificaiton references for your responses. In APA format, give the following response and list at least 3 reference: 1. Discuss how the authoritative literature addresses comprehensive income. 2.

    Foreign country issues in business

    PPQ Parts has determined that for the company to expand globally over the next several years, its managers must be properly trained in multiculturalism and diversity management. PPQ Parts executives must be aware of any political and economic concerns that may arise during the expansion. What are some of the issues the host fo

    Indirect quote, cross rate

    Use the following data in your responses to the remaining questions: Selling Quotes for Foreign Currencies in New York Canada's dollar Spot .8450 30-day .8415 90-day .8390 Japan's yen Spot .004700 30-day .004750 90-day .004820 Switzerland's franc Spot .5150 30-day .5182 90-day .5328 a. Compute the indirect quo

    Determining Net Impact on Car Corp. Income Statement

    Car Corp sold parts to Korean customer on Dec 16, 2008 with payments of 10 million Korean won to be received on January 15, 2009. Date Spot rate Forward rate to Jan 15 Dec 16 08 .00090 .00098 Dec 31 08 .00092 .00093 Jan 1

    Culture in Brazil

    Your manager, Mr. Smith, has personally asked you to research and fill in the cultural profile template prepared by your group. He explains that your completed template will help the board evaluate the company's position on expanding to your selected host country. Research and fill in specific information requested in the t

    Global Business Management Joint Ventures

    The company you work for would like to expand its United States business in the country of Croatia. The company would provide new technology to manufacture light bulbs, and you would take over the managerial aspects of the project from the beginning of the project in Croatia if the project is accepted. You must decide from your

    The International Financial Environment

    Mesa Company specializes in the production of small fancy picture frames, which are exported from the U.S. to the United Kingdom. Mesa invoices the exports in pounds and converts the pounds to dollars when they are received. The British demand for these frames is positively related to economic conditions in the United Kingdom.

    Real GDP for Fish and Chips

    The Republic of Republic produces two goods/services, fish (F) and chips (C). In 2006, the 2000 units of F produced sold for $5 per unit and the 5000 units of C produced sold for $2 per unit. In 2007, the 2500 units of F produced sold for $7 per unit, and the 6,000 units of C produced sold for $3 per unit. Calculate Real GDP for

    Comparing hotel room tariff

    Suppose the Canadian dollar (C$) price of one British pound is C$2.12. A hotel room in London costs 120 pounds, while a similar hotel room in Toronto costs C$250. In which city is the hotel room cheaper, and by how much?

    Forward contracts: international finance

    While you were visiting London, you purchased a Jaguar for £35,000, payable in three months. You have enough cash at your bank in New York City, which pays 0.35 percent interest per month, compounding monthly, to pay for the car. Currently, the spot exchange rate is $1.45/£ and the three-month forward exchange rate is $1.40/£

    Benefits to investors and business; potential risks; revisions

    Following a European Union mandate, from January 1, 2005, onwards approximately 7,000 companies whose stock is publicly traded on European stock exchanges were required to issue all future financial accounts in a format agreed upon by the International Accounting Standards Board (IASB). In addition, some 65 countries outside of

    Foreign currency translation; Statement of changes owners' equity

    See attached file. Show all work. You must utilize the attached excel worksheet to complete the assignment * Do not significantly alter the formatting of the spreadsheet * Do not delete tabs or columns * Do not change column headers or descriptions * Do not alter formatting, shading or colors * Although

    Importing, exporting transactions with forward hedge

    Importing/Exporting Transactions with a Forward Contract Hedge Crystal Exporting Co. is a U.S. wholesaler engaged in foreign trade. The following transactions are representative of its business dealings. The company uses a periodic inventory sys-tem and is on a calendar-year basis. All exchange rates are direct quotations. De

    Return on Foreign Investment

    1. An investor in the USA bought a one-year Singapore security valued at 200,000 Singapore dollars. The US dollar equivalent was $100,000. The Singapore security earned 15 percent during the year, but the Singapore dollar depreciated 5 cents against the US dollar during the same time period ($0.50/SD to $.045/SD). After transfer

    Cross Rate between the Pound and the Yen

    Suppose the pound trades for 13.0840 pesos and the guilder trades for 4.5070 pesos or 65.4090 yen. What is the cross rate between the pound and the yen, that is, how many pounds will the yen buy? a. 0.3265 pounds/yen b. 0.2000 pounds/yen c. 0.0689 pounds/yen d. 0.0053 pounds/yen e. 0.0022 pounds/yen

    Hedging Strategy for Export Earnings using Options

    See the attached file. A company finance director is expecting to receive US$2.1 million in export earnings in 90 days time. At that time she will need to purchase sterling. The spot rate is currently $1.35/£ but she anticipates that it may rise significantly before the earnings arrive. She believes that the best hedging opp

    Forward Market and No Arbitrage Opportunities

    Answer both questions A). The treasurer of a German firm has ?5 million to invest for three months. The annual interest rate in the Germany is 4 percent: the interest rate in the United Kingdom is 2 percent. The spot rate of exchange is ?1.1/£ and the three-month forward rate is ?1.2/£. Ignoring transactions costs, in which

    Prepare journal entries; compute effect to net income

    SECTION 2. FOREIGN CURRENCY HEDGE. On November 1, 2008, King Co. sold inventory to a customer in a foreign country. King agreed to accept 96,000 local currency units (lcu) in full payment for this inventory. Payment was to be made on February 1, 2009. On December 1, 2008, King pays $1,800 for a two-month option on 96,000 l

    Bid-ask spreads for currency

    Please help with the following problem. I need to learn about bid-ask spreads for currency, including how to calculate. Could you please show me how to do these using 2 countries: India and Brazil? Also could you include a summary on how the results could impact a company's decision globalizing their business to those co

    Euro value accounts

    Let me ask you all what I should do. In 2002, I sent $10,000. to my overseas account and had it converted to Euros. Let's say I did this in May of that year. What was the Euro value at that point of conversion? What is the Euro value today? Should I keep the money in Euros or convert it back to US $? (what is the