International Financial Management RKC Assignment 2

Module Title	International Financial Management	Level 7
Title of Assignment	RKC Assignment 2 Delivery 2 2016_17
Programmes undertaking the assignment	Various Business and MScs
Hand-out date	Week 1      Delivery 2      2016_17
Hand-in date	Week 3
Feedback date	Week 5
Weighting within the module	50%
Word limit/presentation criteria	3,000
Learning Outcomes to be assessed (from module spec.)	1.         To examine the impact of such factors as exchange rates, inflation rates and interest rates on the performance of firms and to assess their significance in decision making in an international market/global context 2.       To critically evaluate principles and practices guiding financial management of the multinational enterprise 3.       To explore factors that differentiate multinational from domestic financial management 4.       To devise a risk management strategy to measure and hedge against variation in global financial market prices including financial crises 5.       To prepare students for the high risk high return environment of international finance
Details of the task	As specified
Assessment criteria	Level 7   Outstanding 90-100% Excellent 80-89% Very good 70-79% Good 60-69% Satisfactory 50-59% Unsatisfactory 40-49% Inadequate 30-39% Poor 20-29% Very poor 10-19% Extremely poor 0-9%

 

 

 

 

RKC Assignment 2 Delivery 2 2016_17

International Financial Management

 

Notes:

• Your answers are marked in accordance with the University’s grade descriptors as distributed during the course taking into account that your answers are under assignment conditions.

 

• Pay particular attention to the regulations on plagiarism. We are assessing your ability to develop yourown explanations and evaluations. Referencing should at most play a minor part in your answers.

 

• The word limit is 3000, marks awarded for each section are an approximate indication of the number of words appropriate for the requirement (e.g. 10 marks 300 words or 30 words per mark).

 

• Make sure that you provide FULL ANSWERS to the question that CLEARLY EXPLAIN your answer to the question. Answers without an adequate explanation will receive a fail mark.

 

• When evaluating or discussing you are expected to consider all aspects and conclude with a reasoned judgement.

 

 

 

 

Please answer ALL questions

 

1. “The central bank of Argentina decided to leave its LEBAC (Argentine Central Bank’s Bills of Exchange and Securities)… reference interest rate unchanged at 30.25 percent on July 12^th” http://ift.tt/LDvx10. The comparable risk free (in monetary terms) interest rates in the UK was 1%. The exchange rate was GBPARS 19.23

 

1. Explain why investment in Argentina is not necessarily going to yield higher returns than investment in the UK. Your explanation should make reference to the relevant theory.

(6 marks)

 

 

1. What are the risks and benefits from undertaking a carry trade between the UK and Argentina?

(6 marks)

 

1. How might derivatives protect the interests of a company that imports beef from Argentina given the news about the interest rate

(6 marks)

 

2. Given the following exchange rates GBPARS 19.5, GBPUSD1.3 and USDARS 14.25 consider the following:

 

1. Calculate whether any profit can be made through triangular arbitrage.

(6 marks)

 

1. If it were possible to make a profit through triangular arbitrage what would be the implications for the financial marketplace and the role of arbitrage.

(6 marks)

 

21.     If the 180-day forward rate for the dollar were GBPARS21.45 what                          does this tell you about inflation in Argentina, explain your                                             assumptions and the link with the concept of arbitrage.

(6 marks)

 

3. XYZ plc pays for imports in dollars and has been offered the following quotes for options on the dollar:

 

Strike price of dollar in pence	Call premium		Put premium
	1 year	2 years	1 year	2 years
66	4.8	10.0	4.5	4.0
67	4.5	9.5	5.1	4.4

 

1. Using these figures illustrate and evaluate the benefits and costs from the perspective of a multinational company of a range forward or collar arrangement between the multinational company and its bank.       (8 marks)

 

 

 

4. “Sterling was up against the dollar at nearly $1.35, adding to yesterday’s bounce, having fallen to a 31-year-low of $1.3122 on Monday. It was also   higher against the euro at €1.22.Meanwhile, London’s leading stock market   index the FTSE 100 is now back above where it closed last Thursday before          the polls closed – regaining all the ground lost after the Brexit vote.”              (Money.co.uk 29/06/16)

 

Does this extract contradict the notion of an efficient market? Explain and             briefly           discuss.?

(6 marks)

 

5. Evaluate the ethical argument faced by a multinational for and against free trade as suggested by TTIP

(25 marks)

 

6. Compare and contrast non market hedging or natural hedging with market hedging for a multinational company.

(25 marks)

 

 

END OF PAPER

 

The post International Financial Management RKC Assignment 2 appeared first on Homeworkacetutors.com.

CLICK HERE TO ORDER THIS PAPER………………………NO PLAGIARISM Get 100% Original papers from the writing experts     CLICK HERE TO GET A PROFESSIONAL WRITER TO WORK ON THIS PAPER AND OTHER SIMILAR PAPERS, GET A NON PLAGIARIZED PAPER FROM OUR EXPERTS……