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Essay Instructions: Please answer the following question:
“What factors affect a firm's degree of transaction exposure in a particular currency? For each factor, explain the desirable characteristics that would reduce transaction exposure.
Demonstrate your mastery of these international finance topics through examples including "the numbers" and formulas as appropriate.”


Write this as is relating to multi-national corporations operating in a foreign countries. For your own use, the following link provides a good definition transaction exposure: http://www.wikicfo.com/Wiki/Default.aspx?Page=Transaction%20Exposure&NS=&AspxAutoDetectCookieSupport=1 (No need to restate the definition of transaction exposure in the essay, assume the reader knows what it is already)

Please use 3 real world examples from three different multinational corporations such as Coca Cola, GE, Apple, Goldman Sachs, etc…
Please use 3 online references such as the New York Time, Wall Street Journal, Forbes.com or other reputable online source that does not require a password to be accessed. Do not use site such as wikipedia, ehow, etc… Please include a Reference/works cited page. APA format please.
Thank you!

Essay Instructions: Please Number these responses


1) What factors contribute to the fluctuation of exchange rates?
2) How can political instability affect doing business in foreign countries?
3) What are some differences between business and financial risks?

Essay Instructions: The answers must be in an essay format. You are not to submit answers in an outline format. The essay must explain and discuss the followings terms. For all the items, I am looking for an answer that displays an understanding of the issues, not a school answer. If you take a stand opposed to that of the authors, all that is needed is a solid supporting argument. Independence of mind is no crime. Please discuss the topics not just give textbook answers.

As an example, if you were to choose the topic of outsourcing, I am looking for a complete understanding of the good, the bad and the ugly---so to speak.

• US direct investment in foreign countries and foreign direct investment in the US.
• Functions, and descriptions, of the forward, futures and options market.
• The relationship between the forward rate and the spot rate.
• Domestic interest rates and their affect on the balance of payments.
• Welfare effects of trade of trade creation and trade diversion.
• Purchasing-power-parity theory; limitations and effect on inflation.
• Exchange rates; primarily floating rates and managed floats
• Outsourcing; Benefits and costs.

Essay Instructions: Do Four out of five Questions; Number one must be included in your four.

1 Get the financial data for a company or organization for five years. From the balance sheet and the income statement for the company or organization develop regression line formulae for each line item and predict those line item revenues and costs over the next five years. Don??t do prediction for any item in the statement less than 10% of the total sales on the incomes statement or 10 % of the total Assets. Lump all those values into one account.

2 From the text on page 148 select three leading indicators and three lagging indicators. Collect the data for the past five years and predict the next five years using percent analysis. Discuss each indicator, what it measures and how it would be used in your analysis of economic conditions in your country.
(Book: Managerial Economics ?VTruett+ Truett, ISBN: 0-324-01907-6)

3 Discuss how elasticity of demand is affects by each of the four types of theoretical market models. (Monopoly, Perfect Completion, Oligopoly, and Monopolistic Competition) Explain how you would compete in each of the four market models if you were to export a product to a country that had an economy with each economic model.

4 During the class we discussed several quantitative tools (Excel, graphs, charts, linear program, percent analysis, forecast, regression line) that a business manager could use to make better decisions. Identify, define and discuss two tools that you learned about that will help you in your decision making.

5 You are interested in exploiting the global market and exporting products to several foreign countries. List in terms of your personal preferences five macro and five micro economic conditions that need to be present in the foreign country economy in order for you to do business there.