ppt

Project assignments for International Financial Management FIN648

Papaioannou/Tsetsekos Winter 2019

Preamble

The below narrative provides hypothetical scenarios for your involvement in supporting the expansion of a domestic company abroad. To complete the two assignments below, you are required to identify a country and a company of your choice. While it is assumed that US is the domestic country, there is no reason to designate US as a foreign country. You can identify any company and make assumptions on the amount of revenues that it will capture from foreign product/services sales. The two assignments/projects require actual data and information from public sources as those appearing in the paragraphs below.

The Setting

You work for a company with a good presence in the domestic market but without significant presence in a foreign country. You would like to impress management and advocate for a global expansion in a new market/new country.

Alternatively, you are interested to be employed by a domestic US firm with no operations abroad. You would like to “pitch” your ideas to management for an expansion in a foreign market for products or services offered in the local market.

Regardless of the above scenarios, you have arranged for a meeting with senior management and you are ready to make a presentation. This presentation is 30-minutes long and is divided into two parts:

• The first part is entitled “Country Readiness” and includes macro data about the economic conditions of the country you have selected to do business, as well as corporate data for the sector you are interested your company to expand in this country.

• The second part of the presentation is entitled “Currency Risk Assessment and Hedging” and includes (a) analysis of the historical volatility of the country’s currency vis-à-vis the dollar (sport rates or forward rates) and (a) your recommendations for hedging.

Project 1 – Country Readiness

Review the economic outlook of the country and its financial conditions by evaluating its Balance of Payments statistics, as well as the viability of your company’s expansion in this country by analyzing relevant corporate data of the respective sector.

Develop a max 20-page Power Point Presentation outlining the facts and presenting objectively the challenges, if any, for expanding operations in that particular country.

Project 2- Currency Risk Assessment and Hedging

Review the foreign country’s currency volatility and propose strategies for hedging currency exposure.

Submit a max 20-page Power Point Presentation outlining your findings and reporting your recommendations to senior management.

Data Sources

1. IMF is the principal source of all BOP statistics -- a wealth of information can be found in “Go to the Free Data Portal” of the www.imf.org/en/data.

2. The Federal Reserve Bank of St. Louis provides macro-economic data and tracks recent BOP and GDP data for various countries.

3. The IMF, World Bank, United Nations, Bank of International Settlements and CIA are among major organizations that track, report and analyze country-specific economic and corporate data.

4. The Federal Reserve Bank of NY provides data on currencies and volatilities at www.newyorkfed.org/markets/impliedvolatility.html.

5. Bloomberg offers a comprehensive dataset for all currencies and corresponding volatilities with real time information. You can obtain access through the trading lab at LeBow located in the lobby of GHALL.

6. You are allowed to search and use any other sources of information you deem necessary for the completion of your work, but you are required to cite all sources.

Completion of the assignment

Both reports require submission via Dropbox by 12 midnight March 17th. Late submissions will not be accepted.

Grading

Both projects count for 20% of your grade