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9 pages/β‰ˆ2475 words
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9 Sources
Style:
Harvard
Subject:
Business & Marketing
Type:
Research Paper
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 52.49
Topic:

International Finance

Research Paper Instructions:

The file named REQ is what is required. The file named r111Ref is only so you can have an idea what the company is about. The file Harvard_Ref is how the referencing should be. Please avoid plagiarism. Thank you.

 

International Financial Management Assessment

Assessment for part II of International Financial Management

QuickNourish plc is considering new developments abroad. The two prime candidate countries are the United States and India. The main rivals of QN (Fatmore plc) have recently pulled out of the US and are also thinking of investing in India. Not being in India now it is feared might mean difficulties in the future as they have only recently invited supermarkets to invest in their country. This is not thought to be the case for the US.

The Finance Director, William Money, holds a meeting of the finance team to consider the implications of the two options.

1.The first consideration Mr Money suggests is to identify the macro sovereign risks and problems and their potential effect on QN’s competitive advantage (in fact QN has not established what its competitive advantage really is, though it has been very successful in the UK and the euro area).
1.Mr Money then addresses the problem of valuing the 2 potential investments and asks you to consider how they might be valued.
1.At a more detailed level, Mr Money is concerned about managing the current risk and provides some illustrative data for the Indian Rupee. He asks the question: how are we going to manage our business operations without always having to go to the marketplace to buy derivatives to protect ourselves from the various risks.
1.Finally, Mr Money notes that interest rates are higher in India so at least any money we hold there will be earning a good return.

You are required to write a report that addresses these 4 topics.

(You may use information from part I in your report)

Assessment for part II of International Financial Management

On successful completion of the module a student will be able to:

·assess the properties of various forms of exposure to international financial risks
·measure the effect of exchange rate variation on financial management
·prepare a report on the management of risk in an international environment.
·evaluate the consequences of operational and strategic decisions in an international context and through financial analysis.
·judge the significance and role of alternative future and financial structures in managing international operations.
·assess the relevance of exchange rate  risk management applied to cross-border operations.
Research Paper Sample Content Preview:

INTERNATIONAL FINANCE MANAGEMENT
Student’s Name
Course
Instructor’s Name
Institution
Date
TABLE OF CONTENTS
 TOC \o "1-3" \h \z \u HYPERLINK \l "_Toc385337717"1.0 Introduction  PAGEREF _Toc385337717 \h 3
HYPERLINK \l "_Toc385337718"2.0 Macro-Sovereign Risks and Potential Issues  PAGEREF _Toc385337718 \h 4
HYPERLINK \l "_Toc385337719"2.1 Risk profile  PAGEREF _Toc385337719 \h 4
HYPERLINK \l "_Toc385337720"2.2 Hedging  PAGEREF _Toc385337720 \h 4
HYPERLINK \l "_Toc385337721"Exchange rate risk  PAGEREF _Toc385337721 \h 5
HYPERLINK \l "_Toc385337722"Commodity Price Risk  PAGEREF _Toc385337722 \h 6
HYPERLINK \l "_Toc385337723"3.0 Valuing the Two Potential Investments  PAGEREF _Toc385337723 \h 7
HYPERLINK \l "_Toc385337724"4.0 Operations Management  PAGEREF _Toc385337724 \h 9
HYPERLINK \l "_Toc385337725"4.1 Investment Choices  PAGEREF _Toc385337725 \h 10
HYPERLINK \l "_Toc385337726"4.2 Financing choices  PAGEREF _Toc385337726 \h 11
HYPERLINK \l "_Toc385337727"4.3 Insurance  PAGEREF _Toc385337727 \h 11
HYPERLINK \l "_Toc385337728"5.0 Conclusion  PAGEREF _Toc385337728 \h 12
HYPERLINK \l "_Toc385337729"References List  PAGEREF _Toc385337729 \h 13

International Finance Management
1.0 Introduction
QuickNourish, Plc, is considering new developments outside the United Kingdom. Its prime candidates are the United States and India. To manage risks in international business, QN has to understand the risks that it is exposed to. The process of developing a risk profile requires examination of both product market dynamics and the immediate risk from competition (Wang, 2009, p. 387). In addition, the company has to examine indirect effects of macro-economic forces. There are ways in which the company can develop risk profile by outlining the risk that the company may be exposed to, in either the United States or Indian market. In this line, there is the need to identify the macro-sovereign risk and potential issues, as well as their potential effect on the company’s competitive advantage, and further addressing the problem of valuing the two potential investments (Wang, 2009, p. 388). The company can manage its operations without the need to be at the marketplace to purchase derivatives meant to protect it from various risks while protecting the position of its business in India given that interests are higher, in the country.
2.0 Macro-Sovereign Risks and Potential Issues
The term sovereign risk refers to threats or pressure of operating a business within the legal jurisdiction (Wang, 2009, p. 389). Managers and shareholders often have strong viewpoints regarding the potential risk in certain jurisdictions, which are integrated into the analysis of opportunities. Further, Wang (2009, p. 389) defines sovereign risks as the risks that a sovereign power or a host government ...
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