Allocating Financial Risk

Allocating Financial Risk
Allocating Financial Risk 2
Select one of two recent airport PPPs – St. Petersburg, Russia, or Rio de Janeiro, Brazil. Describe
the PPP process used and what were the critical issues that needed to be overcome? Assess the
factors that will be crucial to the PPP's future sustainability.
This memo examines the public private partnership used to develop the Pulkovo airport in St
Petersburg, Russia.
Pulkovo was the first airport to be developed in Russia using a PPP. The contract is between three
parties: the St. Petersburg City Government, the Pulkovo Airport Company (100% city owned) and
the Northern Capital Gateway Consortium (NCG), the airport operator with the duty of organizing
the management and development of the airport. The contract started in April 2010 and will remain
in force until 2039.
St. Petersburg is Russia's second largest city after Moscow with around 5 million inhabitants. The
city is home to many domestic and international companies, but its economy also relies heavily on
tourism, hence transport links are crucial to the city's growth. Transport infrastructure had suffered
from long term under–investment (KPMG estimated the depletion of Russia's national airport assets
between from 40% to 80%) and in 2008, amid double digit growth in passenger traffic, the existing
airport suffered from overcrowding and would be unable to cater for the 11 million annual passenger
traffic projected for 2012. It was also seen as unable to meet the increased
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Globalization and International Finance, Questions and Answer
Q1. History of your topic (i.e. product, country(ies), article, etc)? Please explain in detail your topic
selection. Globalization is defined as moving towards a world in which barriers to cross–border
trade and investment are declining; distance is shrinking due to new advance in transportation and
telecommunications technology, material culture is starting to look similar the world over; national
economies are merging into an interdependent, integrated global economic system (Hill). The word
itself. "globalize", appeared in the 1960s meaning to "make global in scope or application".
Can be traced from the Silk Road, route between China and the Mediterranean Sea, which promoted
the exchange of ideas and knowledge, along with trade ... Show more content on Helpwriting.net ...
Same way, the increase in income allows India allows to buy from the US. Free trade benefits all.
Also, the wage gap between developing and developed nations is closing due to economic growth.
When outsourcing to lower–wage countries, it contributes to higher unemployment and lower living
standards in their home countries. Free trade allows the goods to be produced thru specialization that
they are more efficient in, while importing the goods that they cannot produce as efficiently.The
cons are That outsoucing has led to depressed wages in developed countries, by moving firm
activities to countries where wages are lower and there is loss of national soverignty. The benefits of
globalization outweigh the costs.As country gets rich there is more strict environmental standards.
5. Please explain the policies and/or government dilemmas, if any. Globalization has eroded national
soveirignity. Government must devise new strategies for managing programs effectively in a
globalized world. Government must adapt to fit traditional vertical systems to the new challenges of
globalization and integrate new horizontal sysstems to the traditional vertical ones. Furthermore, the
government must enhance its ability to govern and manage the transformed environment. New
strategies for efficient management and accountability must be made. North American Free Trade
Agreement (NAFTA) was passed between Canada, Mexico and United States was created after
Mexico

Analysis Of International Banking
Introduction
Banking in today's era is in process of upgrading itself by joining the wave of latest technologies
and trends. Currently, it is in the midst of chaos and disruptions and is in process of reshaping its
business models to alienate the traditional processes. The driving force for Banks to adopt such
changes can be a. Changing customer needs, b. Optimization of cost and Banking Operations, c.
Digitization and Automation, d. Streamlining of complex and lengthy processes and e. New
competitors in the industry.
Trade Finance is one such segment that is typically driven by the traditional methods of processing
and also is laid back in terms of adopting the disruptions. This segment has not changed much in
past few decades.
However, ... Show more content on Helpwriting.net ...
'The Blockchain Technology' is one of such very powerful disruption which has capability to
revolutionize the Trade Finance business for Banks.
Blockchain Overview
A Blockchain is a secure public ledger shared by all the entities of a distributed network which
stores all transaction that have ever been executed in that network. Every transaction that is recorded
over a blockchain network is irrevocable and complete transaction history is auditable. This
technology allows any participant in the business network to access all the record of the transaction.
A transaction may have one or more events. All events of the transaction are recorded in the form of
a block. Once all the recent events are completed then it is saved as permanent record into
Blockchain.
Important Elements of Blockchain Technology
Bottlenecks of Traditional Trade Finance
Banking industry today is in the midst of disruptions. Trade finance is one of the area which still is
driven mostly by the traditional processes and instruments which indeed is a very crucial banking
service assisting global economy. But all thanks to these unavoidable disruptions, the traditional
brick and mortar banking structures and technologies are fast alienating from the industry. These
chaos of disruptions is so powerful that even Trade Finance cannot be estranged from this flow.
Blockchain will

Eco372International Trade and Finance Speech
International Trade and Finance Speech
ECO/372
June 7, 2012
International trade and finance speech
Hello ladies and gentlemen hope you day is going well so fair. My name is Linda, I wanted to come
out and speak with about the International trade and finance I will be handing out a booklet that
show you what I will talking about if you should have an question write the down and I will try
address them all after my speech. In many ways the United States and Japanese are the leading
opponents in the international trade since both countries manufacture numerous amounts of the
same goods. For instance, Toshiba's major competitor in the personal ... Show more content on
Helpwriting.net ...
International trade barriers
You may come across the following problems dealing with the global organizations or multinational
organizations in the worldwide business activity
➢ Quotas–The quotas are the highest quantity of goods and services that is capable of being
imported or else exported at particular period of time. One this happen it forces the company's to
limit their international trade transactions.
➢ Tariffs–Tariff is a government tax that is use to protect the domestic companies by inflict on
goods and services with the intention of being imported or exported from a country
➢ Taxation – firms functioning when dealing with a different country the subject to that country's
laws and regulations.
Conclusion
In the midst of the help from the extremely advanced transportation, modern production methods,
rapid industrialization and the increasing facilities of outsourcing of trade and services the
international trade organization is increasing and decreasing very fast in the globe. The international
trade account has a good distribute of a country's gross on domestic product. It is in addition one of

most important foundations of income designed for the developed as well as to developing country.
For the reason that of many country benefits from the international trade approximately every one in
the

International Finance Homework
HW6 Assignment
FIN465 – Chapters 15,16,17
Instructor: Dr. Blaise Roncagli
You may use your book and notes when working on these problems, and you may work in groups
with others, but the final product that you submit for grading must be your own work. Follow the
instructions provided in this handout very carefully. Failure to follow instructions may result in loss
of points.
Chapter 15 Problems
15–1 Murphy Toys Inc., a U.S.–based MNC, has screened several targets. Based on economic and
political considerations, only one eligible target remains in Malaysia. Murphy would like you to
value this target and has provided you with the following information:
Murphy expects to keep the target for three years, at which time ... Show more content on
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Valuation of Malaysian Target Based on the Assumptions Provided
(numbers are in millions)
Year 1 Year 2 Year 3
Revenue Cost of Goods Sold Gross Profit
Selling & Admin. Exp. Depreciation Earnings Before Taxes
Tax (35%) Earnings After Taxes
+Depreciation –Funds to Reinvest
Sale of Firm
Cash Flows in MYR Exchange Rate of MYR $.25 $.25 $.25 Cash Flows in $
PV (20% disc. rate) Cumulative PV

Value of Malaysian target to Murphy = _______________
b) Will Murphy Toys Inc. be able to acquire the Malaysian target for a price lower than its valuation
of the target? Explain.
Chapter 16 Problems
16–1 Your text lists six strategies that Multinational Corporations can use to reduce exposure to a
host government takeover of a subsidiary. List and describe all of these strategies.
Chapter 17 Problems
17–1 An MNC has total assets of $100 million and debt of $20 million. The firm's before–tax cost of
debt is 12 percent, and its cost of financing with equity is 15 percent. The MNC has a corporate tax
rate of 40 percent. What is this firm's weighted average cost of capital?
17–2 Curtis Industries.is an MNC with a beta of 1.3. The U.S. stock market is expected to generate
an annual return of 11 percent. Currently, Treasury bills yield 2 percent. Based on this information,
what

International Finance Problems Essay
PROBLEMS 1. Mississippi Mud Pies, Inc. needs to buy 1,000,000 Swiss francs (CHF) to pay its
Swiss chocolate supplier. Its banker quotes bid–ask rates of CHF1.3990–1.4000/USD. What will be
the dollar cost of the CHF1,000,000? Answer: The bank's bid rate is CHF1.3990/$. That is the price
at which the bank is willing to buy $1 in return for CHF1.3990. The bank sells dollars at its ask
price CHF1.4000/$. Mississippi Mud Pies must sell dollars to the bank to buy CHF. Therefore
Mississippi Mud Pies will receive the bank's bid rate of CHF1.3990/$. The dollar cost of CHF1
million is consequently CHF 1 million / CHF1.399/$ = $714,796 2. If the Japanese yen–U.S. dollar
exchange rate is ¥104.30/$, and it takes 25.15 Thai bahts to ... Show more content on
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What would be Deutsche Bank's direct asking price for yen (€/¥)? Answer: The direct asking price
of euro per yen (€/¥) is the price at which the bank will sell yen for euros. The bank would want this
to be the same as the price at which it sells euros for dollars (the bank's ask price) times the price at
which it sells dollars for yen. This latter price is the reciprocal of the price at which the bank buys
dollars for yen, which is the bank's bid price of yen per dollar. Thus, the ask price of euros per yen
should be €0.9855/$ [1 / (¥104.30/$)] = € 0.009449/¥
1
2 Chapter 2: The Foreign Exchange Market 5. Western Mining of Australia has called Mitsubishi
Tokyo Financial to get its opinion about the Japanese yen–Australian dollar exchange rate. The
current rate is ¥67.72/A$, and Mitsubishi thinks the Australian dollar will weaken by 5% over the
next year. What is Mitsubishi's forecast of the future exchange rate? Answer: If the Australian dollar
weakens by 5% over the next year, it will take 5% fewer Japanese yen to purchase the Australian
dollar. Thus, the forecast is ¥67.72/A$ (1 – 0.05) = ¥64.334/A$ 6. Consider the following spot
and forward rates for the yen–euro exchange rates: Is the euro at a forward premium or discount?
What are the magnitudes of the forward premiums or discounts when quoted in percentage per
annum for a 360–day year? Answer: The forward rates of yen per euro are lower than the spot rates.

Case: International Trade and Trade Finance
FITTskills: International Trade Finance
Case Study #1: New Modes of Trade Finance
Trade finance in the twenty–first century: plug and pay? Palate–Able Delights (PAD) is a niche
retailer of high–end food products imported from various parts of the world. Iranian saffron and
caviar, French champagnes, Italian truffles and olive oils, vintage balsamic vinegars, fine cheeses,
reserve wines from the leading vintners, even limited–availability spring waters...if a culinary
delight exists, Palate–Able Delights has a mission to discover it, then share it with appreciative
clients who quite happily pay premium for the pleasure. PAD has been very successful as an
importer, but has packaged such unique ... Show more content on Helpwriting.net ...
For now, the company is fine with payment and settlement solutions that will handle small volumes
and have maximums on transaction value. The company CFO has directed a project team in finance
to review some non–traditional settlement options, contrast them with more established options and
report findings and recommendations. You have been appointed to lead the assessment team, to
determine whether such solutions are viable for PAD.
© FITT
1
FITTskills: International Trade Finance
Major Considerations Security Internet–enabled business, including online financial transactions,
has evolved significantly over the past decade, from blue–sky vision to practical tool and enabler.
Despite the recognized progress, security remains a legitimate concern in considering online
payments – as much in terms of the transaction and the flow of payment, as in terms of the overall
risk profile of a transaction. While PAD is generally focused on retail sales, the company is looking
at larger shipments to certain markets, and may face exposures as high as $150,000 in a single deal.
Open account Banks across the globe are recognizing that importers and exporters are shifting
significant business volumes – in fact, the majority of trade – to open account terms. Some of the

financial institutions have interesting offerings in this space, and Palate–Able Delights could benefit
from doing business on open

Finance in International Markets
FINC/ECON 3240 – International Finance Homework Solution Chapter 1 2. Comparative
Advantage. a. Explain how the theory of comparative advantage relates to the need for international
business. ANSWER: The theory of comparative advantage implies that countries should specialize
in production, thereby relying on other countries for some products. Consequently, there is a need
for international business. b. Explain how the product cycle theory relates to the growth of an MNC.
ANSWER: The product cycle theory suggests that at some point in time, the firm will attempt to
capitalize on its perceived advantages in markets other than where it was initially established. 4.
International Opportunities. ... Show more content on Helpwriting.net ...
ANSWER: Snyder can export the clubs, but the transportation expenses may be high. If could
establish a subsidiary in Brazil to produce and sell the clubs, but this may require a large investment
of funds. It could use licensing, in which it specifies to a Brazilian firm how to produce the clubs. In
this way, it does not have to establish its own subsidiary there. b. Which method would you
recommend for this firm? Justify your recommendation. ANSWER: If the amount of golf clubs to be
sold in Brazil is small, it may decide to export. However, if the expected sales level is high, it may
benefit from licensing. If it is confident that the expected sales level will remain high, it may be
willing to establish a subsidiary. The wages are lower in Brazil, and the large investment needed to
establish a subsidiary may be worthwhile. 15. Impact of Political Risk. Explain why political risk
may discourage international business. ANSWER: Political risk increases the rate of return required
to invest in foreign projects. Some foreign projects would have been feasible if there was no
political risk, but will not be feasible because of political risk. 17. International Joint Venture.
Anheuser–Busch, the producer of Budweiser and other beers, has recently expanded into Japan by
engaging in a joint venture with Kirin

Slides For International Finance
Introductory Concepts Short–Run Model: DD and AA Liquidity Trap Macro Policy and CA Slides
for International Finance Aggregate Demand and the SR (KOM Chapter 17) Alan G. Isaac American
University 2012–10–22 Alan G. Isaac Slides for International Finance Introductory Concepts
Short–Run Model: DD and AA Liquidity Trap Macro Policy and CAAA Curve Aggregate Demand
PREVIEW AA Curve review SR model of asset market equilibrium AA: Y E (to maintain asset mkt
eq) DD Curve SR model of output market equilibrium DD: E Y (to maintain asset mkt eq) SR
Model AA + DD: simultaneous output market and asset market equilibrium temporary v permanent
changes in monetary and fiscal policies liquidity trap (zero ... Show more content on Helpwriting.net
...
Isaac Y Slides for International Finance Introductory Concepts Short–Run Model: DD and AA
Liquidity Trap Macro Policy and CAAA Curve Aggregate Demand ^M AA Shifts Up E E E2 E1
E2 E1 Y1 AA' AA Y 0 R∗ + R2 R1 e E1 −E E returns Q1 M1 /P Q2 M2 /P L(R , Y1 ) Alan G. Isaac
Q Slides for International Finance Introductory Concepts Short–Run Model: DD and AA
Liquidity Trap Macro Policy and CAAA Curve Aggregate Demand Êe AA Shifts Up E E E2 E1
E2 E1 Y1 AA' AA Y R∗ + R∗ + 0 e E1 −E E R1 Q1 L(R , Y1 ) Alan G. Isaac e E2 −E E Q Slides for
International Finance returns Introductory Concepts Short–Run Model: DD and AA Liquidity
Trap Macro Policy and CAAA Curve Aggregate Demand Determinants of Aggregate Demand
Aggregate demand the aggregate amount of goods and services that individuals and institutions are
willing and able to buy C: consumption expenditure I: investment expenditure G: government
expenditure (purchases of final goods and services) CA: net expenditure by foreigners (the current
account) Alan G. Isaac Slides for International Finance Introductory Concepts Short–Run Model:
DD and AA Liquidity Trap Macro Policy and CAAA Curve Aggregate Demand Determinants of
Consumption Demand ^ ^ disposable income (Yd = Y – T) (Y–T) C

International Finance Exam
International finance
FIN 412
Exam #2
MC: Examples of single–currency interest rate swap and cross–currency interest rate swap are:
A. fixed–for–floating rate interest rate swap, where one counterparty exchanges the interest
payments of a floating– rate debt obligations for fixed–rate interest payments of the other counter
party
B. fixed–for–fixed rate debt service (currency swap), where one counterparty exchanges the debt
service obligations of a bond denominated in one currency for the debt service obligations of the
other counter party denominated in another currency
X– C. A amp; B
D. none of the above
MC: In the swap market, which position potentially carries greater risks, broker or dealer?
A. Broker
X– B. Dealer ... Show more content on Helpwriting.net ...
risk–adjusted performance
D. risk of default and bankruptcy
MC: Regarding the mechanics of international portfolio diversification, which statement is true?
X– A. Security returns are much less correlated across countries than within a county
B. Security returns are more correlated across countries than within a county
C. Security returns are about as equally correlated across countries as they are within a county
D. None of the above
MC: A fully diversified U.S. portfolio is about?
A. 75 percent as risky as a typical individual stock
X– B. 27 percent as risky as a typical individual stock
C. 12 percent as risky as a typical individual stock
D. Half as risky as a fully diversified international portfolio
MC: With regard to estimates of world beta, measures of the sensitivity of a national market to
world market movements...
A. The Japanese stock market is the most sensitive to world market movements
B. The U.S. stock market is the least sensitive to world market movements
X– C. Both A amp; B
D. None of the above

MC: With regard to the OIP...
A. The composition of the optimal international portfolio is identical for all investors, regardless of
home country
B. The OIP has more return and less risk for all investors, regardless of home country
X– C. The composition of the optimal international portfolio is identical for all investors of a
particular country, whether or not they hedge their risk with currency futures

Harvard Business Case of International Finance , China to...
China: To Float or Not To Float?
International Finance
Executive Summary
On July 21, 2005, China revalued its decade–long quasi–fixed exchange rate of approximately 8.28
yuan per U.S. dollar by 2.1% to 8.11. Simultaneously, the People's Bank of China announced that
the daily trading band of 0.3% against the dollar would be maintained. Many analysts and
economists believed that the real trade–weighted value of the renminbi was undervalued by up to
30% to 35%.
Companies that produce in China for the overseas market, retailers, and importers clearly benefit
from an undervalued Chinese currency, as well as from the abuse of workers' rights. On the other
hand, companies actually producing in the foreign countries – whether for the ... Show more content
on Helpwriting.net ...
Impact of growth in China as well as the rest of the world by the changes in exchange rate policy As
most observers took it for granted that the yuan was undervalued, one specific study estimated yuan
undervaluation against the U.S. dollar of at least 35% based on the price level of goods and services
in China compared with those of its trade partners. As a result, there will probably be a sharp
appreciation of renminbi if Chinese government switches over from the fixed exchange rate policy
to flexible exchange rate policy. A common figure cited for a 20 to 25 percent move of renminbi
would be devastating to China, which would cause deflation, cut economic growth, cut off foreign
direct investment and would destabilize Asia. On the other hand, other low–cost countries in Asia
may benefit from the shift of FDI and production of multinational companies. However, most high–
wage countries like U.S. may still face a rising trade deficit because their imports from other low–
wage countries would replace products made in China.
Sustainability of the current exchange rate policy
Many economists – focusing on the strain the tightly managed exchange rate imposed on China's
economy – agreed that China needed to institute more flexibility. They noted that not only was the
exchange rate expensive to sustain, but it contributed – as well as limited China's flexibility in
responding – to a

5. Foreign Currency Futures Futures contracts are designed to minimize the problems arising from
default risk and to facilitate liquidity in secondary dealing. In the United States, the most important
market for foreign currency futures is the International Money Market (IMM) of Chicago, a division
of the Chicago Mercantile Exchange. The best way to understand these contracts is to compare them
with forward transactions. Like forward contracts, currency futures contracts are, in principle,
contracts to deliver a given amount of currency on a given date and at a pre–specified price to be
paid later on. Like forward contracts, futures contracts have a zero initial market value: neither the
buyer nor the seller has to pay anything ... Show more content on Helpwriting.net ...
Open High Low Settle Change Lifetime High Low JAPAN YEN (CME)  12.5 MILLION YEN; $
per yen (.00) Sep .9458 .9466 .9386 .9389 –.0046 .9540 Dec .9425 .9470 .9393 .9396 –.0049 .9529
Mr94 .... .... .... .9417 –.0051 .9490 .7945 .7970 .8700 Open Interest 73,221 3,455 318 Est vol
28,844; vol Wed 36,595; open int 77,028, + 1,820 The first line shows the size of the contract (12.5
m yen) and states that the prices are stated in USD cents. The June 1993 contract had expired, so the
tree contracts being traded on 29 July 1993 are the September and December 1993 contracts, and the
March 1994 contracts. Note that there was no trading on the March 1994 contracts for that day. The
different headers are: Open: The price at the start of trading on 29 July. High and Low: The highest
and lowest transaction prices on 29 July. Settle: The settlement price on 29 July (representative of
prices around the close). Change: The change in the settlement price between 28 July and 29 July.
Lifetime High and Low: The highest and lowest prices during the life of the contract. Open Interest:
The number of outstanding contracts (note: trading is concentrated in the nearest maturity contract).
The last

Sources Of Finance For Synergy International Limited
This report will research available sources of finance for Synergy International Limited to enable the
company to invest in new machinery, at a cost of approximately £225,000, in order to manufacture
mobile phone covers for the Samsung S7 Edge. Also included in this report, are the information
needs of the different decision makers.
There are long term external sources of finance that Synergy International Limited could access;
they could issue preference or ordinary shares although there would be issue costs. Finance, in the
way of term loans or a mortgage could also be sourced from banks and other financial institutions;
often these are secured with assets which is usually land and property if a mortgage is being
sourced.
To avoid ... Show more content on Helpwriting.net ...
There are short term external sources of finance available in the form of a bank overdraft which is
flexible and can be increased/decreased instantaneously (subject to bank approval). These can be
inexpensive to arrange with competitive interest rates but these rates are higher than a term loan and
this is not a secure form of finance as a bank overdraft could become repayable on demand.
Another source of short term external funding to be considered is asset based finance which is
utilised by debt factoring which will reduce tied up funds in the customer accounts and is outsourced
to a subcontractor. According to Dyson,
'there are two types of factoring: recourse factoring, where an entity obtains a loan based on the
amount of its debtor balances and non–recourse factoring, where the debtor balances are sold to a
factor and the factor then takes responsibility for dealing with them. Factoring is a convenient way
of obtaining ready cash but either the interest rate on the loan or the discount on the invoices may be
high', (2010:437).
Short term Internal sources of finance can be achieved by using tighter credit control, therefore
exercising good cashflow management by reducing terms and payment period to customers although
potential lost sales and the reputation of the company should be considered together with credit
policies adopted by rival businesses.
Synergy International Limited could also improve cashflow by

Question 1 a. The dollar is presently weak and is expected to strengthen over time. These
expectations affect the tendency of U.S investors to invest in foreign securities because the value of
U.S dollar decrease will lead to the U.S company get less profit and earn less money. Consequently,
U.S companies will pay fewer dividends for investors who invest in these companies. So, investors
will tend to invest in foreign securities where they can get higher dividend. On the other hand, a
weak currency can reduce unemployment but maybe it can lead to high inflation, and
simultaneously it may reduce U.S imports and boost U.S exports or buy more goods than it sells
abroad (imports exceed exports). Another thing, in the long run, trade deficits ... Show more content
on Helpwriting.net ...
And when it is expected to strengthen against, owns or earnings from the foreign securities can
periodically be converted back to more dollars when they were sold. Question 2: In my opinion, a
financial manager of Chapman Co. recommends that it wait until the world stock market recover
before it issue stock. He is correct because this is the first time Chapman Co. engage in an initial
public offering (IPO). And IPO is very important so it is the first challenge for company to issue
stock. Consequently, when Chapman Co. waits until the world stock market recover before it issues
stock, this will make Chapman Co.'s stock price increase according to the world stock marker
recover, then, Chapman Co. can gain more profit. Because at the beginning, Chapman Co. issued
stock with initial price, and the world market recover will make the Chapman Co.'s stock price
increases more than initial price. Consequently, Chapman Co. gets more profit from IPO and can
finance its international expansion. On the other hand, if Chapman Co. follows the other managers
to issue stock now even if the world stock market's price would low, the Chapman's stock price
would be low and tend to more decrease according to weak world stock market. So the low stock
price at this time will not encourage people to buy. Moreover, the world stock market is still not
recovered, the other companies' stock may also get problems and lead to decrease their stock price.
And investors will

1. The modes of international trade that car markers use are export and Joint venture.
Export is the most common mode used by car markers. This mode is been carefully approached by
users. Using this exporting approach it causes low risk as automobile companies, they do not put
any of their capital in jeopardy. This help to protect against any losses or prevent the loss to be
devastating. If a company is undergoing a decrease in its exporting, it can typically diminish the
exporting or end the exporting business at a minimal cost.
The second mode is joint ventures. Joint venture is a step that is mutually possessed and worked by
two or more firms. Numerous firms enter the foreign market by taking part in a joint venture with
firms that ... Show more content on Helpwriting.net ...
The third strategy is option. An option contract allows the user to sell or buy currency and it helps to
protect its user who uses it. Inside an option contract it is been divided into 2 part, known as the put
and call options. The user can buy or sell the currency at a certain price. The price is also known as
the strike price or exercise price. Every option has an expiry date for it.
The two appropriate strategies for the German car makers will be forward contract and option
contract.
A forward contract helps save the currency risk. For example Volkswagen needed 5 million SGD to
buy a product. But the company only holds EUR therefore they need to exchange to SGD in order to
buy it. However the spot rate could be low and wouldn't meet that 5 million SGD even if they trade
their EUR. This is when forward contract come in and allow to lock in the exchange rate so that they
can meet the demand of 5 million SGD which they do not have to wait for the exchange rate to meet
their demand wanted. This strategy helps to save a lot of time for the company. After the exchange
rate was lock in they can then negotiate with the bank to get the money.
The next strategy is option. For example if the Volkswagen receive revenue in term of USD. The
revenue they earn will be converted to EUR from USD. However during the currency risk, EUR
may strengthen. If USD is been converted to

Case Study Of Situation In Petra Christian University
Situation In Petra Christian University, I have taken several accounting subjects such as Principles
of Accounting, Financial Accounting, Cost Accounting, Corporate Accounting, Managerial
Accounting, and International Accounting. While in finance subjects, I have taken Financial
Management and International Financial Management. Thus, I am able to say that I am familiar with
the concept of finance and accounting.
Task There are several case studies and report in the accounting and finance courses. In the finance
class, I was taught the recent issues in world economic environment, while in the accounting class, I
was taught to record the transaction and analyze the company's financial statement through balance
sheet, income statement, etc.

Eco/372 International Trade and Finance Speech Essay
Foreign exchange rates and International trade are important aspects of economics. The United
States macroeconomy's health is determined by these concepts and their factors.
International Trade
Exports and imports are what encompass international trade balance. When there are more exports
over imports a trade surplus happens and when there are more imports over exports a trade deficit
happens. A country will acquire large quantities of foreign assets when it runs in a trade surplus so it
can lend internationally to other countries. A country sells of its assets to other countries and
becomes a big debtor nation when it runs on a trade deficit. A ... Show more content on
Helpwriting.net ...
As a result, their businesses may have a difficult time competing with those particular products
made in China. If they match China's prices, the domestic businesses may have minimal profit at
best. Consumers would benefit from the import surplus due to having more choices in the market
and allowing for a lower overhead by buying cheaper electrical machinery products.
Impacts of International Trade
International trade may also have an influence on the Gross Domestic Product or GDP, domestic
markets, and university students. The GDP is the total market value of all final goods and services
produced in an economy in a one–year period (Colander, 2010, p. 183). The GDP can contract if
the U.S. is consuming more than it produces. As a result, if the imports are greater than the exports,
domestic markets may lose earnings because income is being generated in the world market. If the
U.S. has more exports than imports, domestic markets can increase their profit margins because of
the demand for their products through international trade. University students are also affected by
this method of trade because of the jobs that can be created or that are decreased. University
students on decided career paths or those who have already began their career, will benefit if there is
a trade surplus. With a substantial trade surplus, it can create more job

The Advantageous Of Petrodollar And Islamic Finance...
3.7. The advantageous of Petrodollar to Islamic Finance
Petrodollar flows have been among the major factors supporting the growth of the Islamic finance
industry ever since the 1960s GIFF (2010). The rising petrodollar flows in global markets imply
continued and increasing petrodollar investments in the Islamic finance sector. This has led to a
surge of interest in the Islamic Finance sector, with more and more countries positioning themselves
as strategic locations to tap into part of this abundant pool of funds. For instance, a number of
countries worldwide have announced their plans to issue Sukuk (Islamic bonds) and thus meet their
financing needs by attracting high net worth investors (HNWIs) and wealth from the Middle East
region. HNWIs are particularly on the look–out for efficient and secure jurisdictions for investing
their funds, more so in the context of the present economic downturn . Operating in a facilitative
business environment and reducing cost of operations are deemed instrumental factors for market
players. Accordingly, a number of jurisdictions have actively encouraged the development of their
Islamic capital markets as a key strategy for attracting both HNWIs and Islamic finance businesses .
In particular, it has been observed that jurisdictions from across the world are developing their
Islamic capital markets by utilising the efficiency provided by Offshore Financial Centres (OFCs) to
structure Shari'ah compliant products which adhere to the

The Economist, AAnd Opinion On International News,...
In November 2012, The Economist published In Need of Help. The Economist is a weekly
newspaper that offers insight and opinion on international news, politics, business, finance, science,
and technology (Economist.com). James Wilson established The Economist in 1843. A group of
editors help write out the weekly editorials for The Economist. The main audience usually appeals
to the Liberals. The Economist offers an online edition and a printed edition in order to broaden its
audience. The weekly newspaper is printed in six different countries; though all of the readers
receive the same editorial material, the words and advertisements differ. The Economist is written
with a common conversational language type of text. The editors want the readers to be able to
understand exactly what they are reading. The Economist successfully argues that poor people in
America need a voice and support through their use of statistics, and stories.
Poverty is defined as the state or condition of having little or no money, goods, or means of
support (Dictoionary.com). The article was based out of Sumter, South Carolina which is a city
with a small population. The editors chose a city that is truly poverty stricken in order to record the
fullest extent of poverty for their readers. Through the editor's use of the rhetorical devices of logos,
ethos, and pathos they discuss the poverty stricken people in America the article uses relatable
examples that convince the readers that the

International Finance: Study Notes
1) Market seeker design strategy focuses on current market, and current consumer's needs for quick
return on investment. For example US automobile firms manufacturing in Europe for local
consumption are an example of market–seeking motivation. 2) Raw Material seekers extract
unfinished goods used in the manufacture of a product. For example, a steelmaker uses iron ore and
other metals in producing steel. A publishing company uses paper and ink to create books,
newspapers, and magazines. Raw materials are carried on a company 's balance sheet as inventory in
the current assets section. 3) Political safety seekers acquire or establish new operations in countries
that are considered unlikely to expropriate or interfere with private ... Show more content on
Helpwriting.net ...
Blocking of funds is an often used banking procedure to ensure that the same funds are not used
twice. Often more beneficial to an investor than a bank guarantee. 2) Ownership – Is the state or fact
of exclusive rights and control over property, which may be an object, land/real estate or intellectual
property. Ownership involves multiple rights, collectively referred to as title, which may be
separated and held by different parties 3) Religion Heritage – Is the faith in which a person was
predominantly raised or the faith a person 's parents or previous generations have traditionally held.
4) Terrorism – Is the systematic use of terror especially as a means of coercion. No universally
agreed, legally binding, criminal law definition of terrorism currently exists. Common definitions of
terrorism refer only to those violent acts which are intended to create fear (terror), are perpetrated
for a religious, political or ideological goal, deliberately target or disregard the safety of non–
combatants (civilians), and are committed by non–government agencies. Some definitions also
include acts of unlawful violence and war. The use of similar tactics by criminal organizations for
protection rackets or to enforce a code of silence is usually not labeled terrorism though these same
actions may be labeled terrorism when done by a politically motivated group. The word terrorism
is politically and emotionally charged, and

Essay on International Finance
3209AFE INTERNATIONAL FINANCE
Tutorial 5 Answers
Chapter 10
10. Translation Exposure. Consider a period in which the U.S. dollar weakens against the euro. How
will this affect the reported earnings of a U.S.–based MNC with European subsidiaries? Consider a
period in which the U.S. dollar strengthens against most foreign currencies. How will this affect the
reported earnings of a U.S.–based MNC with subsidiaries all over the world?
ANSWER: The consolidated earnings will be increased due to the strength of the subsidiaries' local
currency (the euro).
The consolidated earnings will be reduced due to the weakness of the subsidiaries' local currencies.
12. Economic Exposure. Longhorn Co. produces hospital equipment. ... Show more content on
Helpwriting.net ...
Its New Zealand dollar revenues on sales to New Zealand invoiced in New Zealand dollars are
expected to be NZ$600 million.
c. Its anticipated cost of materials is estimated at $200 million from the purchase of U.S. materials
and NZ$100 million from the purchase of New Zealand materials.
d. Fixed operating expenses are estimated at $30 million.
e. Variable operating expenses are estimated at 20 percent of total sales (after including New
Zealand sales, translated to a dollar amount).
f. Interest expense is estimated at $20 million on existing U.S. loans, and the company has no
existing New Zealand loans.
Forecast net cash flows for St. Paul Co. under each of the three exchange rate scenarios. Explain
how St. Paul's projected net cash flows are affected by possible exchange rate movements. Explain
how it can restructure its operations to reduce the sensitivity of its net cash flows to exchange rate

movements without reducing its volume of business in New Zealand.
ANSWER:
Forecasted Net Cash Flows for St. Paul Company
(Figures are in millions)
NZ$ = $.48 NZ$ = $.50 NZ$ = $.54
Sales
U.S. $100 $105 $110 New Zealand NZ$600 = 288 NZ$600 = 300 NZ$600 = 324 Total $388 $405
$434
Cost of materials U.S. $200 $200 $200 New Zealand NZ$100 = 48 NZ$100 = 50 NZ$100 = 54
Total $248 $250 $254
Operating expenses U.S.: Fixed $

Under Armour Is Gaining Market Share And Challenging Nike
Abstract
Under Armour is gaining market share and challenging Nike in the sports apparel industry.
However, Under Armour is having major issues with inventory management and managing cost.
Inventory cost has increased steadily over the past three years and is now at the point where it is
out weighing revenue.
UNDER ARMOUR: CHALLENGING NIKE IN SPORTS APPAREL
3
CASE DESCRIPTION
Under Armour, Inc., was founded in1996, by Kevin Plank, by a former University of
Maryland football player. The company was born out of an idea to make a T–shirt that provided
compression and wicked or unbelievable perspiration from the individual's skin and thereby
regulating body temperature and eliminating the discomfort of ... Show more content on
Helpwriting.net ...
The company has built an incredible authentic brand in relatively a short period. The
company has been in existence for a little over 15 years and has made huge strides in the textile,
apparel, and luxury goods industry. With success come challenges, and therefore a need for
strategic adjustments. The company's strategy lines up well with the sports apparel industry key
success factors. However, the company has a few weaknesses and threats they need to address in
order for the company to continue on the path of steady growth and stability.

The case study revealed there is a huge issue with inventory management. Under
Armour, inventory strategy is to have enough inventories to fill orders quickly. The company's
year–end 2011 financial statement revealed inventory cost had exceeded revenue gained
UNDER ARMOUR: CHALLENGING NIKE IN SPORTS APPAREL
4
companywide. The increase has caused the days of inventory to increase from 121.4 days in
2009 to 155.8 in 2011 (Thompson et al., 2014, p. c–52). Under Amour's product days of
inventory is much higher than the sports apparel industry and that of its competitors. This
revelation has caused management to consider reducing the products offered by 20 percent.
The other issue revealed is that Under Armour does not own any patents for its products.
This issue poses a huge threat to the company. Under Armour has a group

Crosswell
PEPPERDINE UNIVERSITY
THE GEORGE L. GRAZIADIO SCHOOL OF BUSINESS AND MANAGEMENT
LEN RUSHFIELD MBA 610.63 INTERNATIONAL FINANCE SPRING 2005 WEDNESDAY
6:00 PM – 10:00 PM WESTLAKE VILLAGE CENTER
SYLLABUS
1
International Finance MBA 610.63 Westlake Village Center Wednesday 1/5–2/16/05 Len
Rushfield (310) 474–5848 (603) 843–9683 (efax) leonard.rushfield@pepperdine.edu/
asiaptner@aol.com Course Objectives MBA 610.63 is intended to provide a foundation of
understanding of international finance and the critical options for corporate financial management
within the global markets. Intensive reading will establish the basis of information on international
financial structure, processes and techniques. Cases will identify important real ... Show more
content on Helpwriting.net ...
Students are responsible for all information given during the class instruction. If a student misses a
class or arrives significantly late a make–up assignment may be required and incorporated in the
participation grade. Students missing one class will need to make arrangements with the instructor
for special make–up work. The instructor should be informed of absences prior to the class.
Absences should involve urgent and unavoidable reasons. Students missing two or more classes may
not receive credit for the course. Conmduct The University expects from all of its students and
employees the highest standard of moral and ethical behavior in harmony with its Christian
philosophy and purposes. Engaging in or promoting conduct or lifestyles inconsistent with
traditional Christian values is not acceptable. The following regulations apply to any person,
graduate or undergraduate, who is enrolled as a Pepperdine University student. These rules are not
to be interpreted as all–inclusive as to situations in which discipline will be invoked. They are
illustrative, and the University reserves the right to take disciplinary action in appropriate
circumstances not set out in this catalog. It is understood that each student who enrolls at Pepperdine
University will assume the responsibilities involved by adhering to the

Cross Border Government And The Modern International...
Cross–border government borrowing plays an integral role in the modern international finance
system. Cross–border government borrowing enables governments to substantially increase their
access to cheap credit and can be a particularly attractive option to finance government programs.
While raising taxes or cutting government expenditure can be politically treacherous, borrowing in
the form of government–issued–bonds enables governments to fund programs and promote growth,
which is especially important in developing nations, while smoothing over the costs over a longer
period of time in the future. And while governments may be able to issue and sell bonds to
exclusively its domestic population, doing so is less desirable. For one, the limited amount of
domestic creditors means the government will be forced to pay higher interest rates on their bonds.
Secondly, issuing bonds to exclusively the domestic population is more contractionary than the
alternative of selling bonds to the international community at large, as it takes money out of the
money supply, which can slow economic growth. Therefore, in order to eschew some of the
negative effects that come with selling bonds exclusively to a domestic population, many
governments are willing to engage in cross–border governmental borrowing. While there are some
risks associated with cross–border government borrowing, the opportunities that cross–border
governmental lending presents in terms of its ability to produce growth,

Notes on International Finance
Section A 2. The relative purchasing power parity condition holds that prices in different countries
will different by roughly the same amount over time. This condition is based on the idea that
differences in prices from one country to another reflect differences in underlying cost factors,
access to inputs, taxation and other country–specific variables. Specially excluded in this condition
is the exchange rate. Over time, the condition assumes, the movements of interest rates and
exchange rates will mean that there is parity in the prices of goods between the two countries. The
condition assumes therefore that any differences in prices can be explained in terms of non–currency
country–specific factors. In the short run, there is no such assumption. This is because there is
sometimes a time lag with respect to price changes. While currency exchanges rates and interest
rates can change quickly, price changes can be slower for a number of reasons. Moreover, some of
the inputs costs might change but again there is a time lag for these changes. The condition of
relative purchasing power parity, therefore, is said to exist mainly in the long run. 6. In this situation,
you borrow the $1,000,000, convert it into 1,500,000 Swiss francs. This money would be invested in
Switzerland, earning 22,500 francs. After three months, the total of 1,522,500 francs will be
converted back to dollars at 1.48, so $1,028,716. The total USD repayment will be $1,025,000. The
proceeds will be the

ECON 4131, International Finance, Spring 2002, Exam 3...
Final Exam Questions –– Economics 4131, Spring 2006
1. Explain how the gold standard operated in the classical period (1870–1914). What were the
advantages and disadvantages? Some say the gold standard sacrificed internal balance to external
balance. How? What were the rules of the game and what would happen when they were violated?
What would happen when the demand for monetary gold rose faster than the supply, and why was
this a problem?
2. Explain the functioning of the Bretton Woods currency arrangement. Why was it designed as it
was? What strains appeared over time, and what factors led to its collapse?
What was Triffin's dilemma?
3. Use the national income accounting identity to explain the phenomenon of twin ... Show more
content on Helpwriting.net ...
What is sterilization, and how might it be employed (and why)?
5. When capital is mobile, a country may choose to peg its exchange rate, or it may choose to peg
its money supply, but it cannot do both simultaneously. Explain.
6. Explain the full derivation of the AA–DD model from Krugrman and Obstfeld, Chapter
16. Explain how and why the economy returns to equilibrium from any point away from the
intersection of the two curves. Explain what it means to be above or below AA or
DD, respectively.
7. Use the AA–DD model to illustrate how the economy adjusts to an increase in government
spending when a) exchange rates are flexible; b) exchange rates are fixed.
Discuss.
8. Use the AA–DD model to illustrate how the economy adjusts to an increase in the domestic
money supply (expansionary monetary policy) when: a) exchange rates are flexible; b) exchange
rates are fixed. Discuss.
9. Use the AA–DD model to explain what will happen to an economy if investors (and/or
speculators) lose faith in the fixed parity of the exchange rate (i.e. if they anticipate a future
exchange rate that suddenly becomes higher). Discuss the full ramifications for the country whose
credibility is doubted and challenged in this respect.
10. Explain the 3 perspectives on the U.S. Current account deficit which Mann describes.
In her view, how likely is the U.S. to face a balance of payments/devaluation crisis as a

Exercise Questions for Mid–term Exam 1. Which of the following factors of production DO NOT
flow freely between countries?
A) Labors and Land
B) Financial capital
C) (Non–military) Technology
D) All of the above factors of production flow freely among countries.
2. Under the gold standard of currency exchange that existed from 1879 to 1914, an ounce of gold
cost $20.67 in U.S. dollars and £4.2474 in British pounds. Therefore, the exchange rate of pounds
per dollar under this fixed exchange regime was
A) £4.8665/$.
B) £0.2055/$.
C) always changing because the price of gold was always changing.
D) unknown because there is not enough information to answer this question
3. The post WWII international monetary agreement that ... Show more content on Helpwriting.net
...
pound, yen, and Chinese yuan.
21. A ________ transaction in the foreign exchange market requires an almost immediate delivery
(typically within two days) of foreign exchange.
A) spot
B) forward
C) futures
D) none of the above
22. A forward contract to deliver British pounds for U.S. dollars could be described either as
________ or ________.
A) buying dollars forward; buying pounds forward.
B) selling pounds forward; selling dollars forward.
C) selling pounds forward; buying dollars forward.
D) selling dollars forward; buying pounds forward.
23. A common type of swap transaction in the foreign exchange market is the ________ where the
dealer buys the currency in the spot market and sells the same amount back to the same bank in the

forward market.
A) forward against spot
B) forspot
C) repurchase agreement
D) spot against forward
24. The ________ is a derivative forward contract that was created in the 1990s. It has the same
characteristics and documentation requirements as traditional forward contracts except that they are
only settled in U.S. dollars and the foreign currency involved in the transaction is not delivered.
A) nondeliverable forward
B) dollar only forward
C) virtual forward
D) internet forward
25. If the direct quote for a U.S. investor for British pounds is $1.43/£, then the indirect quote for the
U.S. investor would be ________ and the direct quote for the British investor would be ________.
A) £0.699/$;

International Trade And Finance ( Bus571 )
Ntec
Concordia Institute of Business
Submitted to: Adrian liew
Course: Diploma in Business Management (Level–7)
Subject: International trade and finance (BUS571)
Submitted By: Amanpreet singh bajaj
Student ID:CIB00002YB
Assignment: International trade
Introduction
Quality NZ is a niche supplier of New Zealand's first quality products and services to the rapidly
expanding Indian market, with a specific focus on the food and Beverage, Tourism and Education
sectors . Quality NZ has ownership of a number of subsidiaries that represents us in both NZ and
India (through our Indian based import Company) there products are all personally selected to
ensure only the finest Quality is presented to our customers in india . With the deep passion India's
have for Cricket , Quality NZ is privileged to have Sir Richard Hadlee as our Patron ( and a
shareholder ) and Company Ambassadors , Stephen Fleming Daniel Vettori and Brendor McCullana
The networks and relationships formed through our cricketing representatives and our Indian based
staff provide us with significant credibility to the Indian market.( www.qualitynz.com)
www.qualitynz.com
Business units and subsidiared :–
Fonterra Brands
Consumer goods business
Fonterra Ingredients
Fonterra Global Trade Dairy ingredients supplier to the globally traded market
Fonterra foodservices Hospitality supplies

Fonterra Group Manufacturing
Fonterra's

Thomson University Personal Statement
Through my lifetime, I have witnessed the ever–changing world of business and the myriad of
global and regional, socioeconomic and political changes accompanied with it. This has not only
shaped my actual reality, but has also sparked a genuine interest in global affairs and International
economics and finance. From events of the 2008 global financial crisis, to more recent events in my
home country Nigeria, who is currently in an economic recession, triggered by a drop in oil prices
and financial mismanagement, it is a given that the world is a reflection of global interrelations, and
with this, I describe economics as the core of world discussion and finance as its driving tool. This is
the reason I am determined to devote myself to the cause of developing an expertise in the
interaction between politics, international finance and global markets with the hopes of contributing
to the building of an accountable and democratic economy both at home front and on an
international platform.
My first degree in Mining Engineering has helped me develop a natural affinity for thinking
outside the box, being observational and leaving no option unturned when faced with a challenge
or a task. This was one of the major reasons why I pursed an independent study research on the ...
Show more content on Helpwriting.net ...
An ideal career for me perfectly fuses the practices of finance and the capacity to solve both
economic and social problems in the real world: a career that deals with sustainable investments that
have social or developmental impacts. On this course I would like to probe specific problem areas
such as the application of quantitative analysis to understanding various issues in global finance and
the interplay of international business and the global economy. My research interests are in
International trade and development, emerging and frontier capital markets, international finance
and banking, and macroeconomic policy financial

Blades Plc Parity Relations in International Finance
International Finance FIE433
Case Study 2 – Parity Relations in International Finance
Instructions
Students should allocate themselves into Consultancy Teams of around four people (final
confirmation of the number in each team to be given after student enrolment). Choose a unique
business name for your team. All teams should be prepared to present their results/conclusions to the
rest of the class. A printout of the presentation slides should be uploaded on Its Learning and made
available to me at the start by ALL teams. I will then choose randomly the teams to give their
presentations of no longer than 20 minutes on the assigned tasks during the tutorials. Emphasis
should be put on the presentation of the key points and the overall ... Show more content on
Helpwriting.net ...
Besides the bid and ask quotes for the Thai baht provided in the previous question, Minzu Bank has
provided the following quotations for the pound and the Japanese yen: Quoted Bid Price Quoted
Ask Price
Value of a Japanese yen in British pounds £0.0057 £0.0058
Value of a Thai baht in Japanese yen ¥2.69 ¥2.70
Determine whether the cross exchange rate between the Thai baht and Japanese yen is appropriate.
If it is not appropriate, determine the profit you could generate for Blades by withdrawing £100,000
from Blades' current account and engaging in triangular arbitrage before the rates are adjusted.
Exchange quotation are not appropriate. There is a possibility for arbitrage, because it is possible to
buy Thai bath for 0,0151 £ in Minzu ban and sell it by 2,69*0,0057=0,0153 what gives 0,0002£
profit per unit. Potential investor convert the currency £ into :Thai bath in Minzu Bank getting 1000
000/0,0151= 6 622 516,6 Thai bath. Then he/she can convert the money into Yen 6 622 516,6*2,69=
17 814 569,5¥ and at the end convert it into British pound again 17 814 569,5* 0,0057= 101 543,05
£
The profit from arbitrage – 1543,05 £
3. Ben Holt has obtained several forward contract quotations for the Thai baht to determine whether
covered interest arbitrage may be possible. He was quoted a forward rate of £0.015 per Thai baht for
a 90–day forward contract. The current spot rate is £0.0151. Ninety–day interest rates available to
Blades in the United

International Finance And Globalisation ( Mn7574 )
Assignment in the elective module: International Finance and Globalisation (MN7574)
Conducted by: ...............
Word Count: ....
Describe the three key institutional bodies established in the Bretton Woods agreement. What was
their purpose, and how did they operate? Give an account of the collapse of the agreement and
discuss the consequences of this collapse for international finance.
This coursework is submitted as part of the requirements for the award of the MSc in Finance
University of Leicester – School of Management
Leicester
July 2014
Table of Contents
Introduction 3
Section 2: Bretton Woods Institutions: purpose of establishment and cooperation 4
Section 3: Bretton Woods: The chronology of events 6 ... Show more content on Helpwriting.net ...
Opponents of the EU argue that since the formation of the Euro area we have observed an increasing
divergence between the northern and southern European countries; with the former enjoying the
majority of the benefits of the common currency and the latter facing significant issues with their
macroeconomics and struggling to keep up with their northern counterparts.
The formation of the EEA, however, was not the first attempt by societies to converge their interests
under a common economic policy. Its predecessor, the Bretton Woods system that was formatted in
1944, endeavoured to set up a set of rules that would define the monetary relationships between a
number of countries. Its primary feature was the commitment by the member nations to maintain a
relatively fixed exchange rate against the dollar, which was tied to gold at a fixed rate.
Alongside with the set up of the system, the members agreed to establish two institutional bodies
that would oversee the members' activities, provide assistance when needed and maintain the
cooperation between the members. Those were the International Monetary Fund (IMF) and the
World Bank of Trade and Development (World Bank). Subsequently, the members aimed to
establish the International Trade Organization (ITO) that was replaced by the General Agreement on
Tariffs and Trade (GATT). All three

International Trade and Finance Speech Essay
Economics Paper 5
Financial Pitfalls 2
Ladies and Gentlemen of the House, good afternoon to you all. I would like to thank you for the
opportunity to speak to you this today on such an important topic – our economy.
Our economy is in crises mode. To say that our economy has slowed down would be an
understatement. The economy, to date, has taken a step backwards and the direction we are heading
will take us from a record long–lasting recession to an all–out financial depression.
Americans consume far more goods than we produce on a monthly basis. What that means, simply
put, is that we continue to build more debt and get poorer with every passing month. Think of it ...
Show more content on Helpwriting.net ...
By producing quality parts at a cheaper rate is nothing new but the Chinese are being criticized by
many for benefitting from illegal currency manipulation which leads to unfair trade policies. These
policies pose a real threat to American automotive jobs in the near future.
International trade has a significant effect on the Gross Domestic Product. The GDP is the true
market worth of officially recognized goods or services produced in a country. Think about this for a
moment – if you were to go into a department store and found two shirts that were identical in color,
material and stitch but one was priced ten dollars higher than the other. Which one would you
choose? Easily you would pick the cheaper product and that is the issue American consumer's face
each day.
Larger corporations have the ability to mass–produce products and pay their workers far less than
those here in the states. They do this across the globe in what is called slave labor. As a result, there
are fewer jobs available in the United States, more across the globe, and more goods being imported
into the country and a more dramatic effect on our economy.
Financial Pitfalls 4
We have exhausted our means to generate additional income for our nation through tariffs and
sanctions on goods being brought into the country. The taxes levied on goods and the limits placed
on incoming products and goods can impact and possibly obstruct international trade.
This

International Finance, Exchange Rates And Also Balance Of...
In this paper I will be going over and discussing what international finance, exchange rates and also
balance of payments. I will be talking about what they are, what they do, and how they affect us an
economy and country. I will be discussing the basic definitions, and the basic concepts of their
duties. First I will be going over international finance and the role it plays in our daily lives. Then I
will discuss the price differences between items in the United States and Germany. I will add and
compare them together. I will also go over what the concept balance of payments are.
International Finance International finance is defined the study of international monetary economics,
which involve the interaction of international transactions. (Investopedia, 2015) These transactions
consist of factors, such as national income, money and prices. The international monetary system is
made up of institutions, international organizations, governments, and private economic entities that
all participate in the exchange of financial assets worldwide. (Smith, 2012) With international trade,
international finance is the result of the fact that economic activity is affected by the existence of
nations. If there weren't any national economies, then we would not have this field. If we didn't have
international trade, we would not need international finance. Countries do trade with each other.
Some countries, not all but many of them use their own currencies we have to wonder about how

International Business Finance Worksheet 10
International Business Finance Worksheet 10
1. One of the main arguments against companies choosing to cross–list is the cost of following
regulations of foreign stock markets. This cost to cross–list may make it prohibitive for the company
to list the stocks in the foreign market in the first place. In addition to the cost, the company may not
wish to provide as much information as the particular exchange requires. This can be particularly
true if a foreign firm is thinking of listing on a United States stock exchange, which has a high
amount of regulation and information needed before the stock can be listed. Another main argument
against companies choosing to cross–list deals with the ownership control level that may be changed
by listing on other exchanges. Cross–listing on other exchanges adds foreign investors into the
company, which does offer benefits. However, more foreign investors of a company also dilutes the
percentage of investors in the corporation that are from the domestic country. The corporation may
not wish to provide several benefits of improved company performance, such as dividends and
return from a high future stock price, to a high degree of foreign investors. Instead, the corporation
would choose not to cross–list, even though it does provide benefits, to keep a high percentage of
the investors from the domestic country. This keeps any potential benefits from strong future
performance of the company with domestic investors. It also prevents

Eco 372 Week 5 Individual International Trade and Finance...
| |
|The U.S. Macroeconomy State. |
| |
| |
| | ... Show more content on Helpwriting.net ...
However, not everything is rose color. As a result of the economic expansion and diversity of goods
and services provided by the international trade, prices are more competitive increasing the market
competition among producers, which provide domestic consumers with cheaper products.
One of the major advantages of trading is that it allows producers to concentrate or specialize their
work in the type of goods they produce best. When people decide to specialized in a specific
profession an become doctors, farmers, teachers, or any other profession within an economy, they
will be able to produce goods and offers different services that can be trade for any goods or
services they may need. In this same way countries can become specialized in the production of
specify products and/or services and trade those with other countries. However, trading and
importing products and services from other countries also has its disadvantages. As a result of the
different products imported governments impose certain restrictions and limitations to protect the
domestic production and market of every country involve in any kind of trading transactions.
Governments have imposed taxes on trading transactions adding them to the cost of importation,
and have the purpose of restricting and/or limiting the imports of goods and services into a country.
These government

Impact Technology Has Brought on the Management of...
Findings : To identify the positive and negative impact that changes in technology have brought on
the management of international finance. With internet being one of the developments of IT, the
results showed that it has culminated in improved customer convenience. Yet despite other advances
in the management of IF, this arm has thrashed to fully control the power and promise of technology,
with the customers looking forward to solutions that are not only faster and cheaper, but that also
provides customer convenience and efficiency. Convenience is much related to access to a service at
any time , hence the customers are now able to make even across the borders payments from their
homes through the internet which is more convenient than actually going to the bank to make a
payment. 87percent of the respondents agreed that the change had brought a positive effect in the
way the internal finance transactions are now being managed with 55 percent strongly agreeing. The
positive impacts of the evolution of IT on the management of international finance include greater
efficiency, increased transaction volume and improved customer convenience. The internet is an
example of technology that has brought about increased transaction volume. According to the
research that was conducted, 42 percent of the organisations that participated strongly agree, while
18 percent agree and 40 percent are indifferent that increased transaction volume was a result of the
internet. Greater

Essay on finance case vanguard international growth
Issues
1. Explain why an individual investor might want to invest in an international growth fund?
2. Describe the risk associated with making an investment in an international growth fund. Identify
the risks that would be common to domestic an international funds, and those risk that would be
unique to an international fund.
3. Discuss how the fact that foreign companies are not subject to the same accounting, auditing, and
financial reporting standards and practices as U.S. companies poses a risk not typically encountered
when investigating in the stock of U.S. companies.
4. Consider the allocation of funds assets by region. Speculate as to why the portions of fund assets
are distributed in this manner.
5. Consider the country ... Show more content on Helpwriting.net ...
The International Growth Fund annual report that ended in August 31, 2009 showed that 94% of the
Funds portfolio was invested in 177 non U.S. stocks and 6% was in temporary cash investments. All
values are presented in the tables.
Analysis
1. An individual investor may want to invest in an international growth fund because of trying to
expand or growth in the foreign market. Another reason would be to diversify and acquire more
knowledge about the foreign economy.
2. Some risks that are common between domestic and international funds are: losing money and
management risk. Any investment has some type of risk. Losing money is the first risk that every
investment has whether it is domestic or international. Management risk is the bad management
decisions that a company makes. Some unique risks that only international funding has are:
economic risk, country/regional risk, and currency risk. Currency risk is the chance that the value of
a foreign investment, measured in U.S. dollars, will decrease because of unfavorable changes in the
currency exchange rates. Economic risk is the stability of a country's economic. Country/regional
risk is political, financial troubles, and natural disasters that will affect the value of securities issued
by companies in foreign countries or regions.
3. Foreign companies are not subject to the same U.S. Accounting Practices the foreign stock and
bond markets operate differently from the

Chapter 4
Practice Problems
Percentage Depreciation
Assume the spot rate of the British pound is $1.73. The expected spot rate one year from now is
assumed to be $1.66. What percentage depreciation does this reflect?
($1 66 – $1 73)/$1 73 = –4.05% ($1.66 $1.73)/$1.73 4 05% Expected depreciation of 4.05% percent
Inflation Effects on Exchange Rates
Assume that the U.S. inflation rate becomes high relative to Canadian inflation. Other things being
equal, how should this affect the (a) U.S. demand for Canadian dollars, (b) supply of Canadian
dollars for sale, and (c) equilibrium value of the Canadian dollar?
 Demand for Canadian dollars should increase,  Supply of Canadian dollars for sale should
decrease, and  The ... Show more content on Helpwriting.net ...
interest rates, while U.S. investors reduce their investments in Canada's securities.  This places
downward pressure on the Canadian dollar's value.
3
Interaction of Exchange Rates
How might this affect the value of the Canadian dollar against the Japanese yen?
 Japanese investors that previously invested in Canada may , p shift to the U.S. Thus, the reduced
flow of funds from Japan would place downward pressure on the Canadian dollar against the
Japanese yen.
Relative Importance of Factors Affecting Exchange Rate Risk
Assume that the level of capital flows between the U.S. and the country of Krendo is negligible and
will continue to be. But there is a substantial amount of trade between the U.S. and the country of
Krendo. Which affect, high inflation or high interest rates will be seen in the value of the Krendo's
currency? Krendo s The inflation effect will be stronger than the interest rate effect because inflation
affects trade flows.
 The high inflation should cause downward pressure on the kren.
Speculation

Blue Demon Bank expects that the Mexican peso will depreciate against the dollar from its spot rate
of $.15 to $.14 in 10 days. The following interbank lending and borrowing rates exist:
U.S. dollar Mexican peso Lending Rate Borrowing Rate 8.0% 8.3% 8.5% 8.7%
Assume that Blue Demon Bank has a borrowing capacity of either $10 million or 70 million pesos
in the interbank market, depending on which currency it wants to borrow.

International Trade and Finance
Linda Luc Duong
ECO/372
August 27, 2012
Matthew J. Angner
When there is a surplus of imports brought into the United States it means that the price of the
products will drop. Companies in the United States are competing with the Chinese made products
will suffer from price drops on goods. Lower prices on goods will benefit consumers. Large screen
Liquid Crystal Display (LCD) and High Definition Television (HDTV) is a good example. Because
of the recession there has been a surplus of large screen LCD and HDTV. Not many people can
afford or buy them with the high prices. Large screen LCD/HDTV is much cheaper than what it was
four years ago.
The effect of international ... Show more content on Helpwriting.net ...
The dollar must be raised so that there is a high–demand for the United States dollar. The
government must promote the qualities and products made in the United States of America. All
companies must be able to compete with companies based in China. What this mean is that all goods
made in the United States of America are given high priority over Chinese made goods.
Questions
· What happens when there is a surplus of imports brought into the U.S.? Cite a specific example of
a product with an import surplus, and the impact that has on the U.S. businesses and consumers
involved. When there is a surplus of imports brought into the U.S. it means that the price of the
product(s) will drop. U.S. companies that are competing with the Chinese made products will suffer
from price drops of the goods. With consumers it will benefits the consumer with the lower price on
goods. Large screen LCD/HDTV is a good example. Since the recession there has been a surplus of
large screen HDTV. Not many people can afford or buy them since the prices were high. Now large
screen LCD/HDTV is much cheaper than what it was 4 years ago. · What are the effects of
international trade to GDP, domestic markets and university students? The effects of international
trade on GDP are that GDP and employment goes hand in hand. What this mean is that as
employment move out of the United States it create smaller GDP in return. As international trade
with imports of goods also

Allocating Financial Risk

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