Reference no: EM131520642

Finance Assignment

Discussion Question 1: "Interest Rate and Currency Swaps"

Please respond to the following:

• Compare and contrast interest rate swaps and currency swaps to determine which type of swap you believe is most appropriate for the most investors. Explain your rationale.

• From the first e-Activity, analyze the risks of interest rate and currency swaps of the country you researched. Provide specific examples to support your response.

Discussion Question 1b: "International Portfolio Investment"

Please respond to the following:

• From the second e-Activity, discuss the conditions under which exchange rate changes could actually reduce the risk of foreign investment for the company you researched in the country you selected. Provide specific examples to support your response.

• Explain how the advent of the euro affects international diversification strategies.

E-ACTIVITIES FOR Discussion Question 1 AND 1B

e-Activities

• Use the Internet to research the risk of interest rate and currency swaps of a foreign country of your choice. Be prepared to discuss.

• Use the Internet to research a U.S.-based publicly-traded company and the exchange rate of a foreign country in which that company does not currently conduct business. Be prepared to discuss.

Discussion Question 2: "Foreign Direct Investment and Cross-Border Acquisitions"

Please respond to the following:

• From the first e-Activity, create a list of 2-3 scenarios that would encourage the firm you researched to invest overseas, as well as a list of the most likely risks that firm would encounter when doing so. Explain your rationale.

• Select a country with which you are (at least somewhat) familiar and create 2 to 3 best practices for managing the risks associated with direct foreign investment.

Discussion Question 2b: "International Capital Structure and the Cost of Capital"

Please respond to the following:

• From the second e-Activity, create a list of actions the company you researched could take to mitigate the negative effects of operating in a segmented capital market. Explain your rationale.

• Discuss the conditions under which you would recommend a foreign subsidy conform to the local norm of financial structure. Provide examples to support your response.

E-ACTIVITIES FOR Discussion Question 2 AND 2B

• Use the Internet or the Strayer Online Library to research a U.S.-based publicly-traded company in which you are at least somewhat familiar. Be prepared to discuss.

• Use the Internet or the Strayer Online Library to research a publicly-traded company currently operating in a segmented capital market (a different company than the one researched in the first e-Activity). Be prepared to discuss.