International Financial Management: United Kingdom

Assignment 2 Requirements 1) Consider your group country and its trading partners. Based on your review of the Economist, Wall Street Journal, the Financial Times and other similar periodicals, which of these countries is having currency problems? What are the causes of those currency problems? List at least one country per group member. If you cannot find any current problems, then search and summarize the most recent currency problems for your country and its partners. (20 points) 2) Search for any recent currency interventions by the central banks of your country and its trading partners. What reasons did the monetary authorities give for these interventions? List at least one central bank intervention per group member. How much money was expended during these interventions? Summarize your findings. You can find stories of these interventions by searching the resources mentioned earlier or the websites of the central banks linked through the BIS website. (20 points) 3) For the multinational companies that you listed in your selected country in assignment 1; which country/region seems to be the biggest concern in terms of currency volatility and country risk for these companies? Search their most recent 10K reports or some recent articles that provide evidence for the activities of these companies regarding currency risk issues. What is their approach of these companies regarding foreign exchange risk management? Do these companies hedge? If yes, what types of currency exposures are they hedging i.e. translation, transaction or operating exposures? What hedging techniques are they using? Summarize your findings in relation to the overall foreign exchange risk management for these companies. (20 points) 4) Consider again your specific group/country: what is the general assessment of your country’s risk? Has the risk increased or decreased over the past year? What factors caused this change? Each member of the group needs to access a different resource here and provide an independent/objective view. Briefly discuss your findings. (20 points) 5) Conclusions and Recommendations. In this section, you should compare the approaches towards foreign exchange risk management of the companies in your group and highlight the similarities and differences. You should also summarize the overall findings of your analysis and provide any recommendations that you might have for your companies and others that consider doing business in your group country. (20 points) You should also provide appropriate support for your statements by clearly referencing your resources. Let me know if you have any questions.