Home
Add Document
Sign In
Register
international finance - group assignment
Home
international finance - group assignment
...
Author:
api-287840671
7 downloads
380 Views
951KB Size
Report
DOWNLOAD .PDF
Recommend Documents
GROUP ASSIGNMENT
Description complète
International Finance
International FinanceFull description
International Trade and International Finance
International Trade and Finance
ASSIGNMENT FINANCE -II
CA2 group assignment complete.docx
Full description
Incineration-Environment Group Assignment
incineration processFull description
Pse Problems Group Assignment
ASSIGNMENT
Group Assignment MChange(1)
assignment
CMI Group Assignment
Coursework
Group Assignment Hi6007 statitics
statiticsFull description
cours de finance international
Description complète
52686618 International Finance
ADVBS Group Assignment Documentation
Advanced database assignment
MGT4320 Group Assignment Complete)
Finance Assignment 1
based on time value of money.
Finance Assignment 1
Finance assignmentFull description
International Finance Ass.
International finance assignemtn solvedFull description
Corporate Finance, Home Assignment
Relates with Corporate Finance a MBA ModuleFull description
Assignment 05 - Virgin Group
The Strategies being followed by Virgin Group
FSA Group Assignment
fsa
Group Assignment Mkt 243
Full description
Group Assignment Mkt 243
Full description
Group 2 - Group Assignment 2 - Parts Emporium
Full description
Group 2 - Group Assignment 2 - Parts Emporium
Descripción completa
!" Lati#a Al Fa$%el &'('20)& BSB – 7302 International Finance -Group Project
BLUE SEAR CARS
A%*a$ Al S%ari# – 20)200))2 +a,en +a,en ael Al%u!!ain Al%u!!ain – 20))000&( Alaa .a!i* Raja/ - 20)0007)
Content! Executive summary................................................................................3 2"0 Intro$uction Intro$uction........................................................................................4 ........................................................................................4 3.0 Hedging strategy.............................................................................. strategy.............................................................................. 5 3") Euro Pa1*ent Pa1*ent e$in Strate1"""""""""""""""""""""""""""" Strate1"""""""""""""""""""""""""""""""""""""""""""""""""""""""" """""""""""""""""""""""""""" """"""""""""""" """""""""""""" " & 3"2 .P+ . P+ Pa1*ent e$in Strate1""""""""""""""""""""""""""" Strate1"""""""""""""""""""""""""""""""""""""""""""""" """"""""""""""""""""""""""""""""""""""""""""""" """""""""""""""""""""""""""" & 3"3 GBP Pa1*ent Pa1*ent e$in Strate1"""""""""""""""""""""""""""""""""""""""""""" Strate1""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" """"""""""""""""""""""""" """4 """ 4 3"5 .P+ . P+ Pa1*ent e$in Strate1""""""""""""""""""""""""""" Strate1"""""""""""""""""""""""""""""""""""""""""""""" """"""""""""""""""""""""""""""""""""""""""""""" """""""""""""""""""""""""""" 4 3"& 68 Pa1*ent e$in Strate1"""""""""""""""""""""""""""""""""""""""""""" Strate1""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" """"""""""""""""""""""""""" """" 4 4.0 Outlook and Research.......................... Research.................................................................. ........................................ ..... 7 5") Factor! Factor! a9ectin t%e :alue o# t%e currenc1"""""""""""""""""""""""""""" currenc1"""""""""""""""""""""""""""""""""""""""""""""" """"""""""""""""""""""""""" """"""""" 7 5"2 Currenc1 Currenc1 pairin""""""""""""""""""""""""""" pairin""""""""""""""""""""""""""""""""""""""""""""""" """"""""""""""""""""""""""""""""""""""" """"""""""""""""""""""""""""""""""""""""""""""""" """""""""""""""""""""""""""""" ( 4.2.1 USD""""""""""""""""""""""""""""""""""""" """"""""""""""""""""""""""""""""""""""""""""""""""""""""" """"""""""""""""""""""""""""""""""""""" """""""""""""""""""""""""""""""""""""""""""""""""""" """"""""""""""""""""""""""""""""" ( 3.2.2 EUR/USD (Euro against 1 USD) """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""( 4.2.3 GBP/USD (British Pound against 1 USD) """""""""""""""""""""""""""""""""""""""""""""""""""""" 4.2.4 USD/JPY (Yen against 1 USD) """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""")0 4.2. USD/!"D (!"D against 1 USD) """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""))
5"3 ;ec%nical Anal1!i!""""""""""""""""""""""" Anal1!i!""""""""""""""""""""""""""""""""""""""""""" """""""""""""""""""""""""""""""""""""""" """""""""""""""""""""""""""""""""""""""" """"""""""""""""""""""""""""" """"""""" )2 5.0 Evaluation......................................................................................13 &") Calculation!"""""""""""""""""""""" Calculation!"""""""""""""""""""""""""""""""""""""""""" """""""""""""""""""""""""""""""""""""""" """""""""""""""""""""""""""""""""""""""" """"""""""""""""""""""""""""""""""""""" """"""""""""""""""" )3 &"2 e$in Strate1"""""""""""""""""""""""""""""""""" Strate1""""""""""""""""""""""""""""""""""""""""""""""""""""" """"""""""""""""""""""""""""""""""""""""""""""" """""""""""""""""""""""""""" """"""""""" )3 &"2") Euro Pa1*ent e$in Strate1 Calculation!""""""""""""""""""""""""""""""""""""""""" Calculation!""""""""""""""""""""""""""""""""""""""""" "")3 &"2"2 .P+ Fir!t Pa1*ent e$in Strate1 Calculation!"""""""""""""""""""""""""""""""""""""")5 &"2"3 GBP Pa1*ent Pa1*ent e$in Strate1 Calculation!""""""""""""""""""""""""""""" Calculation!"""""""""""""""""""""""""""""""""""""""""""" """"""""""""""" )& &"2"5 .P+ !econ$ Pa1*ent Strate1 Calculation!"""""""""""""""""""""""""""""""""""""""""" Calculation!"""""""""""""""""""""""""""""""""""""""""""""""")4 """""")4 &"2"& 68 Pa1*ent Pa1*ent Recei
'((endices..........................................................................................%1
Executive summary
% & Pae
;%e #ollo>in report con!i!t! o# #our *ain part! t%at %a! to $o >it% t%e appl1in o# currenc1 $eri
#ollo>in in?? e$in e$in !trate1@ =utloo an$ Re!earc%@ E
e %a
#ollo>in in tran!action!? US8'EUR call option contract@ US8'.P+ #or>ar$ contract@ US8'GBP Call option option Contra Contract@ ct@ US8'. US8'.P+ P+ For> For>ar ar$ $ Contr Contract act@@ an$ an$ US8'6 US8'68 8 For>ar or>ar$ $ Contra Contract" ct" Rear$in t%e outloo an$ re!earc%@ a clear anal1!i! an$ e
in !%o>in t%e *o
an$ inDo> pa1*ent!" ;%e outloo an$ re!earc%@ re!earc%@ t%at inclu$e$ ure! c%at! an$ tren$ anal1!i!@ %a! /een /een con$ con$uc ucte te$ $ on t%e t%e curr curren enci cie! e! *a$e *a$e ai$e ai$e$ $ i! in $eci $eci$i $in n >%ic >%ic% % %e$ %e$in in !trateie! !%oul$ /e applie$" Anal1,in t%e currenc1 rate! $urin t%e la!t
it% t%e co*pan1! tran!action! >ere appreciatin aain!t t%e US8 currenc1" :ariou! *et%o$! %a
e >ere a/le to e
e %a
e
a! re!ulte$ in t%e !econ$ pa1*ent o# t%e .P+@ t%at i! $ue to t%e *i!interpretation o# t%e tren$ an$ nu*/er!" In or$er to /oo!t t%e prot o# t%e enterpri!e >e in
a! !a
ere a/le to *ae a total prot o# 4&"3074" e >ere a/le /1 t%e en$ o# t%e perio$ to %a
a! calculate calculate$ $ /1 !u/tract !u/tractin in t%e total inDo>! #ro* t%e outDo>! inclu$in t%e in
e %a
e %a$ t%rou%out %i! journe1@ >e %a
ill >ill en%a en%anc nce e an$ an$ i*pr i*pro< o
3 & Pae
%.0 )ntroducti )ntroduction on ;%e #ollo>in report carrie! out a re!earc% re!earc% an$ a!!e! t%e entr1 into currenc1 currenc1 $eri
ill *ae an$ recei
ill /e $i!cu!!in $i!cu!!in t%e %e$in !trateie! /1 !%e$$in li%t on %o> t%e1 >ill /e *anae$ in t%e FK *aret@ t%en oin o
ritten /1 t%e CF= o# Blue Sea Car! Pri
4 & Pae
3.0 Hedging strategy e !tu$ie$ t%e *aret #ro* all a!pect!@ in or$er to /e a/le to c%oo!e t%e /e!t %e$in !trate1@ >%ic% >ill ena/le to protect u! #ro* an1 ri! t%at *i%t appear in t%e #uture" E!peciall1 t%at *o!t currencie! %a$ a lot o# Ductuation! an$ are
e al!o *a$e !ure t%at >e !tu$1 t%e currenc1 pairin correctl1" etoro ;%e Currenc1 Currenc1 pair! >ere c%o!en /a!e$ on t%e outDo>! an$ inDo>!@ an$ /a!e$ on t%e pa1*ent! t%e enterpri!e %a! to *ae@ all o# t%e currencie! %a! to /e paire$ to t%e US 8ollar@ %ence re!ultin in t%e *ajor currencie! /ein paire$" So*e o# t%o!e *ajor parin are lie t%e GBP'US8@ US8'.P+ an$ US8'EUR" ;%o!e *ajor currencie! currencie! %a
ell >ell e!ta/li e!ta/li!%e !%e$ $ countrie! t%at %a
ell $ene$ econo*ic in#ra!tructure an$ rule!@ %ence >e can i$enti#1 t%e* a! co*parati
e %a
%ic% >e %a
%ic% *a$e it !tart to $epreciate" Gi
e %a
%ic >%ic% % can can i
%ic% >e are a re !eein" etoro ;%e rea!on >%1 >e c%o!e t%i! !trate1 i! t%at@ >e are not o/lie$ to eJerci!e at t%e en$@ %ence i# t%e EUR >%ere to appreciate >e can eJerci!e an$ collect our prot" %ere a! i# it continue$ to $epreciate aain!t t%e US8 >e >ont eJerci!e@ an$ ju!t loo!e our pre*iu*" 3.% +*, *ayment Hedging !trategy For t%e !econ$ tran!action >e %a
ar$ contract in or$er to %e$e our po!iton" A#ter a !erie! o# anal1!i! an$ re!earc% >%ic% %a
een /ot% rate!" In or$er #or u! to pre
e %a
ar$ tran!action to uarantee a certain rate" A #or>ar$ contact >oul$ !et t%e rate >%ic% >e are !eein an$ a %a
;%e rea!on >%1 >e c%o!e t%e #or>ar$ contract #or t%i! pa1*ent@ i! #or t%e #act t%at >e can cu!to*i,e t%e contract to *eet our nee$@ in a$$ition to not pa1in a pre*iu*" oreo
e can in
e %a
a1" Ba!e$ on t%e anal1!i! an$ re!earc% >%ic% >e %a
#or>ar ar$ $ cont contra ract ct >oul >oul$ $ /e !uit !uita/ a/le le %a
e %a$ to /e caut cautio iou! u!"" ;%at ;%at i! >%1 >%1 >e %a
%ere a#ter all >e %a
e$ t%e appreciation o# t%e GBP aain!t t%e US8@ %ence !uc% *o
e eJecute t%e call option in or$er to o/tain prot out o# t%e tran!action" (Yahoo# $inan%e& 'GBP/USD uotes *n+o'& 2,1)
Lie *entione$ *entione$ in t%e r!t pa1*ent t%o!e are t%e rea!on >%1 >e c%o!e t%e call option@ e!peciall1 >%ic% it! a lare a*ount" ;%e rea!on i! t%at >e are not o/lie$ to eJerci!e at t%e en$@ %ence i# t%e EUR >%ere to appreciate >e can eJerci!e an$ collect our prot" %ere a! i# it continue$ to $epreciate aain!t t%e US8 >e >ont eJerci!e@ eJerci!e@ an$ ju!t loo!e our pre*iu* 3.4 +*, *ayment Hedging !trategy For t%e !econ$ .P+ tran!action >e %a
%ic% i! t%e #or>ar$ contract" ;%at i! $ue to !a*e re!earc% an$ anal1!i! t%at >e %a
een t%e *o
e
e %a$ to in!ure t%at >e pic a $ate >%ere t%e currenc1 pair i! at t%e pea@ in or$er to o into a #or>ar$ contract" ence oin into a #or>ar$ contract >ill pro
it% t%e DeJi/ilit1 !ince it! cu!to*i,a/le" 3.5 / *ayment Hedging !trategy For t%e la!t pa1*ent >e %a
ar$ contract in or$er to o/tain prot out o# t%e inDo> pa1*ent to /e *a$e to our account" ;%e 68 rate i! currentl1 currentl1 at it! %i%e!t e
%1 >e $eci$e$ to enter into a #or>ar$ contract at t%e current rate !o t%at >e can uar uaran ante tee e our our c%an c%ance ce to *a ae e pro prot" t" enc ence e $ue $ue to t%e !li !li%t %t Ductua Ductuatio tion! n! t%at t%at /ot% /ot% curre currenci ncie! e! are are encoun encounter terin in@@ %ence %ence t%e enter enterpri pri!e !e !ecur !ecure! e! t%e a*ount a*ount t%e1 t%e1 >ill >ill recei recei
7 & Pae
4.0 Outlook and Research 4.1 2actors 2actors aecting the alue o$ the currency ;%ere are !o *an1 #actor! t%at %a! a $irect i*pact on t%e *o
a1! con!i$ere$ /1 anal1!t! a! one o# t%e *ain $etri*ent! o# %o> %ealt%1 i! t%e econo*ic !tatu! o# t%e countr1" ;%e1 pla1 a *ajor role in $eter*inin $eter*inin t%e le
%ic% >%ic% curre currenc1 nc1 i! %i%er %i%er %ence %ence %a
%ic% currenc1 %a! t%e lo>er rate %ence %a
e< o>e
oul$ /e t%e Gree 8e/t Cri!i!@ an$ t%e i*pact it %a! on t%e entire European currenc1" 8ue to t%e continuou! /ail out t%at t%e1 are pa1in an$ t%e increa!e in t%e !o
oul$ >oul$ /e t%e polic1 polic1 o# Huanti Huantitat tati
er intere!t rate! an$ to create *ore *one1" %. *ul *ulic ic et et ;%ere are are a lot o# nation le
oul$ lie lie to con$uct@ an$ nee$ #un$in #un$in %ence %ence one one o# t%e t%e *ain *ain !ourc !ource! e! #or #un$in #un$in >oul$ >oul$ /e t%rou% $e/t" ;%e purpo!e i*ple*entin !uc% project! i! to increa!e #orein in
a! not a/le to pa1 /ac t%e $e/t@ it >ill !tart to print *ore *one1 >%ic% >ill cau!e inDation >%ic% >ill cau!e t%e currenc1 to $epreciate" A oo$ eJa*ple aain >oul$ /e t%e Gree $e/t cri!i!@ >%ere t%e countr1 $e#aulte$ #or t%eir ina/ilit1 to pa1 /ac t%eir $e/t!" 3. 6rade rade ala alance nce ;ra$e ;ra$e /alance i! *ea!ure$ /1 calculatin t%e $i9erence $i9erence /et>een t%e le
ei%! t%e eJport it >ill re!t in a tra$e $ecit" %en a countr1 #ace! tra$e $ecit! it *ean! t%at t%ere i! an outDo> o# $o*e!tic currenc1 to t%e #orein *aret!" A oo$ eJa*ple o# tra$e $ecit i! >%at i! %appenin in t%e USA #or t%e pa!t #e> $eca$e! an$ t%at i! $ue to t%e US $ollar /ein %el$ /1 #orein countrie!" o>e
%en t%e eJport! are *ore t%an t%e i*port! it! calle$ tra$e !urplu!" 4. ierent ierentials ials in )nation )nation88 )nterest )nterest Rates Rates Intere!t rate! all o
orl$ are !et /1 central /an!@ t%e1 control intere!t rate! rate! to contr control ol inDat inDation ion rate" rate" For For in!tan in!tance ce i# t%e t%e inDat inDation ion >a! %i%@ %i%@ t%e intere!t rate et! increa!e$ /1 t%e CBB in or$er to $ecrea!e t%e le
inDation@ %ence increa!in t%e
e can relate intere!t rate! to currenc1 /1 !tatin@ t%at t%e %i%er t%e intere!t rate@ t%e %i%er t%e
4.% #urrency (airing 4.2.1 USD ;%e Unite$ State! 8ollar i! t%e *o!t $e*an$e$ currenc1 currenc1 in t%e FK *aret a*on!t all ot%er currencie!@ #or t%e #act t%at a! a currenc1 it can /e paire$ >it% al*o!t all ot%er *ajor currencie!@ in a$$ition to it /ein u!e$ a! a /enc%*ar /enc%*ar in t%e #oreJ *aret" US8 a! a currenc1 i! %el$ /1 *o!t central /an! aroun$ t%e >orl$@ #or it i! rear$e$ rear$e$ a! t%e national re!er
it% a couple o# currencie! !uc% a! t%e Ba%raini 8inar@ Matari Ri1al an$ .or$anian 8inar" -rading E%onoies& 'United States Doar'& 2,1)
3.2.2 EUR/USD (Euro against 1 USD) ;%e Euro an$ t%e 8ollar repre!ent! repre!ent! t%e >orl$! lare!t econo*ie!" Bot% currencie! t%rou% t%e 1ear! %a
itne!!e$ !u/!tantial
%at %a! %appene$ in t%e pa!t #ro* t%e tec% /oo*@ to t%e A*erican *ortae cri!i! to t%e European $e/t cri!i!@ t%o!e t>o currencie! >%ere a/le to >it%!tan$ %i% le
in
e
" & Pae
;%e a/o
e! t%e currenc1 currenc1 *o
e can !ee !ee t%at t%e t%e t%e euro euro lo!t *ore *ore t%an ) aain!t t%e t%e US8" Since t%e t%e /ei /einn nnin in o# a1 a1 20)0 20)0 an$ an$ o o
/et>ee een n US8'EUR 0"(37 an$ US8'EUR 0"7534" 8urin t%o!e Ductuation! t%e Euro >a! a/le to reac% to it! %i%e!t point at 0"(37@ >%en t%e Euro appreciate$ aain!t t%e US8" o>e
ent /ac to $epreciatin $epreciatin aain aain!t t%e 8ollar@ reac%in it! lo>e!t poin pointt 0"47 0"474) 4) /1 t%e en$ en$ o# Apri Aprill 20)) 20))"" ;%e ;%e tren tren$ $ o# Ductu Ductuat atin in cont contin inue ue$ $ t%rou%out t%rou%out t%e 1ear! >%ere it >ent /et>een US8'EUR 0"7(03 an$ US8'EUR 0"75&(" In 20)5 20)5 t%e Euro Euro contin continue$ ue$ to appr appreci eciate ate aain! aain!tt t%e t%e $olla $ollarr reac% reac%in in 0"(077 0"(077"" o>e
it% all >%at i! %appenin in t%e econo*1 an$ t%e ne>! re!earc%e$ t%e currenc1 i! appeare$ to $epreciate aain!t t%e 8ollar reac%in to a US8'EUR)"2)@ t%an! to t%e Uraine an$ t%e Greece cri!i!"
4.2.3 GBP/USD GBP/USD (British Pound Pound against 1 USD) ;%e Great Briti!% poun$ i! reDecte$ a*on!t t%e >orl$! ol$e!t currencie! currencie! in ter* o# circulation up to t%i! $ate" ;o tra$er! an$ e
it% t%e US8@ Euro an$ .apane!e +en" 8ue to Lon$on! location an$ t%e %i%
orl$" (Yahoo# $inan%e& 'GBP/USD uotes *n+o'& 2,1)
Anot%er rea!on t%at #a
%ic% i! t%e Doatin rate!" ;%i! !1!te* #acilitate! #or tra$er! to /u1 an$ !ell t%e GBP in o9!%ore /an!" ;%e t%ir$ rea!on #or t%e %i% $e*an$ #or t%e GBP@ i! $ue to t%e currenc1 currenc1 #ace! #ace! a lot o# eJtr eJtre*e e*e an$ !%arp !%arp Ductua Ductuatio tion!" n!" ;%o!e ;%o!e eJtr eJtre*e e*e Ductu Ductuati ation! on! are are attracti
10 & P a e
re!e*/le! t%i! !%aine!! i! t%e Ductuation! t%at %a! al>a1! /een t%e ca!e in t%e GBP" ;%e GBP'US8 currenc1 currenc1 pairin i! al>a1! re#erre$ to a! ca/le t%i! ca/le currenc1 currenc1 i! t%e %i%l1 tra$e$ currenc1 currenc1 in t%e *aret" *aret" ;%e #ollo>in rea!on rea!on i! one o# t%e *o!t
%1 t%e a/o
Bot% parin are
;%e a/o
a! $epreciatin $epreciatin aai!nt t%e GBPuntil GBPuntil t%e en$ o# a1" a1" %ere a#ter>ar$!@ it ept on appreciatin aain!t t%e GBP@ >it% Ductuation! o# t%e cro!! rate >%ere it ne
ent /loe> )"&000 $urin t%e #ollo>in 5 1ear!" a
%ere it reac%e$ it! lo>e!t in t%e /einnin o# April 20)& at )"57)& >it% a !li%t !li%t increa!e$ increa!e$ #ollo>e$ /1 t%e t%e !econ$ >ee o# april" Ba!e$ Ba!e$ on t%e t%e #oll #ollo> o>in in ue uerre! t%at t%at >re >re o/ta o/tain ine$ e$ #ro* #ro* t%e t%e rap rap%@ %@ >e can can %a
ill /e #acin ! !erie! o# Ductiation! $urin t%i! 1ear@ >it% a %i% $erpreciation co*pare$ to t%e pre
4.2.4 USD/JPY USD/JPY (Yen (Yen against 1 USD) USD) ;%e .apane!e 1en i! tra$e$ in lare
or$! t%e t%ir$ *o!t tra$e$ currenc1 in t%e >orl$" Since t%e +en %a! relati
intere!t 11 & P a e
rate!@ %ence /ot% t%e US8 an$ AU8 u!e! it in carr1 tra$e!" ;%i! !trate1 i! !ellin curr currenc encie! ie! >it% >it% lo> inter intere!t e!t rate! rate! in or$er or$er to purc% purc%a!e a!e curre currenc1 nc1 >it% >it% a %i%e %i%err intere!t rate!" .apan #or 1ear! 1ear! %a
%ic% t%e1 >ere %tin %tin to et out o#" ;%e1 trie$ to intro$uce re#or*! t%at /acre$ an$ %a$ a neati
a! intro$uce intro$uce Muantitati
a! t%e lare!t %ol$er o# A*erican trea!ur1 trea!ur1 /ill!@ until t%e1 >ere replace$ /1 c%ina" ;%e1 al>a1! eep t%eir currencie! lo>er t%an t%e US8 #or tra$e purpo! purpo!e!@ e!@ %o>e
e
a! >a! not t%e ca!e ca!e !ince !ince .apane .apane!e !e co*pan co*panie! ie! !tarte !tarte$ $ to out!ource #or c%eaper in t%e countrie! it!el#"
Ba!e$ on t%e a/o
e can $e$uce t%at t%e rate re*aine$ a/o
a! Ductuatin #ro* t%e 1ear 200 to 20)0 /et>een t%e #ollo>in rate! o# US8'.P+ (4"42 an$ US8'.P+ 5"&5" ;%e .apane!e 1en !tarte$ to $epreciate $epreciate aain!t t%e US 8ollar in t%e en$ o# .une reac%in to it! lo>e!t point >%ic% US8'.P+ 7&"3 on =cto/er 20))" Startin #ro* t%e en$ o# Fe/ruar1 20)2@ t%e +en !tart to appreciate !%arpl1 aain!t t%e US8 reac%in US8'.P+ 3"43" ;%i! !%arp increa!e continue$ until t%e *i$ o# a1 reac%in US8'.P+ )02")5" E
n to tra$e %ea
it% one anot%er"
1% & P a e
4.2. USD/!"D USD/!"D (!"D (!"D against 1 USD) ;%e 6u>aiti 8inar con!i$ere$ con!i$ere$ to /e to /e t%e %i%e!t
%ic% i! >ort% clo!e to 3"&&" It i! t%e onl1 $inar currenc1 >%ic% i! $i
aiti l!" ;%e currenc1 i! *o!tl1 a9ecte$ /1 t%e %i% oil re
ait pro$uce!" %ere 6u>ait %a! )0 o# t%e >orl$! cru$e oil >%ic% earn! t%e countrie! *ore t%an 7& o# it! earnin!" ;%e %i%
aiti $inar al!o i
ait a %i% purc%a!in po>er #or i*portin aricultural pro$uct! t%at 6u>ait lac! to %a
;%e a/o
it% a rate rate o# 0"2(73 until t%e en$ o# auu!t 20)) >it% a rate reac%in it! lo>e!t at 0"2720 arain!t t%e $ollar" o>e
it% t%e rate eac%in o# 0"2()&" a#ter>ar$!@ t%e 68 68 !trate$ to $r*aticl1 $r*aticl1 appreciat appreciate e till t%i! $a1 aai!nt aai!nt t%e US8 rec%in rec%in at it! %i%e!t rate! >itne!!e$ $urin t%e la!t & 1ear! at a !pot rate o# 0"3022 in to$a1!" /a!e$ on t%e #ollo>in uere! t%at >re o/taine$ #ro* t%e rap%@ >e can %a
ill re*ain !ta/le >it% a !li%t appreciation co*pare$ to t%e pre
4.3 6echnical 'nalysis It i!
ill ena/le %i* to *ae $eci!ion! t%at >ill 1iel 1iel$ $ t%e* t%e* pro prot" t" enc ence e ;ec%n ec%nic ical al anal anal1! 1!i! i! i! a *et% *et%o$ o$ o# pre$ pre$ic icti tin n pric price e *o
;%i! anal1!i! tae! into con!i$eration con!i$eration >%at actuall1 %appene$ in t%e *aret@ rat%er tain >%at !%oul$ %a
in #ollo>in t%ree t%ree point!? point!? • • •
aret action $i!count! e
;ra$er! ;ra$er! $epen$ on price c%art!@
ill %elp tra$er! *ae $eci!ion on >%en are t%e entr1 an$ eJi!t point o# tra$e@ in a$$ition to /e a/le to pre$ict tren$! an$ t%e !trent% an$ !uita/ilit1" It %elp! t%e in
ant a !%ort or lon po!ition" In ot%er >or$ >or$! ! #or eJa* eJa*ple ple i# t%e in
ill c%oo!e a lon a po!ition" ;%ere are are *an1 tec%nical tec%nical in$icator! in$icator! t1pe! t%at t%at are /ein utili,e$ !uc% !uc% a!? • • • • •
;ren$ ;ren$ Strent% :olatilit1 C1cle o*entu*
5.0 Evaluation Ba!e$ on t%e *aret re!earc% an$ t%e !trateie! c%o!en@ to %e$e our po!ition aain!t currenc1 eJc%ane Ductuation!" Ba!e$ on t%e Pa1*ent !c%e$ule t%at t%at t%e enterpri!e %a! to *ae in t%e /elo> ta/le ate
3)'3')& ))'5')& )2'&')& 2&'&')& )'4')&
#urren cy US8 EUR .P+ GBP .P+ 68
'mount 7@7&0@000 54&@000 )@&00@000 00@000 ))@0000@000 )7&@000
Ca!% a
=utDo> =utDo> =utDo> InDo>
e create$ 5 !trateie! t%at are aline$ >it% t%e account! pa1a/le an$ recei
pa1*ent"
14 & P a e
;%e ;a/le a/o
! an$ inDo>! t%at %a! to /e *a$e"
&") Calculation! In t%i! !ection >e are oin to %i%li%t t%e $etaile$ calculation! t%at >%ere per#or*e$ #or eac% !trate1 in or$er #or u! to $eri
&"2 e$in Strate1 &"2") Euro Pa1*ent e$in Strate1 Calculation! ;%e pa1*ent pa1*ent %a! to /e *a$e *a$e on t%e 3)!t o# arc%@ %ence to %e$e t%e enterpri!e po!ition aain!t t%e Ductuation!@ >e %a
=ption NAt t%e one1O" $irst Ste5 Buing the 0a otion
)" Co!t o# =ption =ption Pa1*ent Pa1*ent A*ount A*ount J Pre*iu* Pre*iu* J Spot aret aret Rate Rate Co!t o# t%e option EUR 54&@000 J 0"025) J )")202 #ost o$ the o%tions & USD 12'3.213 Se%ond Ste5 E6er%ising the otion to a o7igation 2" EJerci!in EJerci!in t%e t%e option option Pa1*ent Pa1*ent A*ount A*ount J Strie Price EJerci!in t%e =ption EUR 54&@000 J )"0&& Eerising the *%tion & 4+,'- -hird Ste5 8ount Re9uired 3" ;otal =ption =ption Co!t =ption Co!t Co!t Q EJerci!e EJerci!e t%e t%e =ption ;otal ;otal =ption Co!t )2@&&3"&2)3 )2@&&3"&2)3 Q 50@&7& ota *%tion #ost & USD ,3'120.213 $ourth Ste5 Pro:t ;ade +ro E6er%ising the tion
15 & P a e
5" Prot A*ount A*ount ReHuire$ ReHuire$ – En$in En$in A*ount A*ount ReHuire$ ReHuire$ Prot US8 &0&@&5"&00 - US8 &03@)2("&2) Prot & USD 2'4.+-+
&"2"2 .P+ Fir!t Pa1*ent e$in Strate1 Calculation! For t%e Secon$ pa1*ent %a! to *a$e on t%e )) t% o# April@ *oreo
e /elie
%e$in tool >oul$ /e a For>ar$ contract"
$irst Ste5 %on
)" A*ount reHuire$ reHuire$ in US8 Pa1*ent Pa1*ent A*ount A*ount J Spot Bi$ Rate A*ount ReHuire$ in US8 .P+ )@&00@000 J )')20"(4 ount Re5uired Re5uired in USD & USD USD 12'411.,4 12'411.,4 Se%ond Ste5 0a%uate the $or=ard Rate
2" For>ar For>ar$ $ rate Spot rate rate - Bi$ Bi$ Point Point')00 ')00 For>ar$ Rate )2)"55 – 33"00')00 6or7ard Rate & 121.1,1 -he $"D Points are su7tra%ted 7e%ause the 7id > as? oint.
-hird Ste5 0a%uate the re9uired 8ount
3" ReHuire$ ReHuire$ A*ount A*ount Pa1*ent Pa1*ent A*ount A*ount ' =ne =ne ont% For>ar$ For>ar$ Rate ReHuire$ A*ount .P+ )@&00@000 ' )2)")0) Re5uired ount & USD 12'30.3 $ourth Ste5 $ourth Ste5 Pro:t ;ade +ro E6er%ising the $or=ard 0ontra%t 0ontra%t
5" Prot A*ount A*ount ReHuire$ ReHuire$ – En$in En$in A*ount A*ount ReHuire$ ReHuire$ Prot US8 )2@5))"0&5 - US8 )2@3(4"3&& Prot & USD 24.++
&"2"3 GBP Pa1*ent e$in Strate1 Calculation! ;%e pa1*ent pa1*ent %a! to /e *a$e *a$e on t%e )2t% o# a1@ %ence to %e$e t%e enterpri!e po!ition aain!t t%e Ductuation!@ >e %a
$irst Ste5 Buing the 0a otion
)" Co!t o# =ption =ption Pa1*ent Pa1*ent A*ount A*ount J Pre*iu* Pre*iu* J Spot aret aret Rate Rate Co!t o# t%e option GBP 00@000 J 0"022) J )"5()( #ost o$ the o%tions & USD 2+'4-3.,,2 Se%ond Ste5 E6er%ising the otion to a o7igation 2" EJerci!in EJerci!in t%e t%e option option Pa1*ent Pa1*ent A*ount A*ount J Strie Price EJerci!in t%e =ption GBP 00@000 J )"570& Eerising the *%tion & USD 1'323'4,.,, -hird Ste5 8ount Re9uired 3" ;otal =ption =ption Co!t =ption Co!t Co!t Q EJerci!e EJerci!e t%e t%e =ption ;otal ;otal =ption Co!t US8 2@573"002Q US8 )@323@5&0"00 ota *%tion #ost & USD 1'32'+23.,,2 $ourth Ste5 Pro:t ;ade +ro E6er%ising the tion 5" Prot A*ount A*ount ReHuire$ ReHuire$ – En$in En$in A*ount A*ount ReHuire$ ReHuire$ Prot US8 )@3(5@&)&"00 - US8 )@3&2@23"002 Prot & 31'+2.,,
&"2"5 .P+ !econ$ Pa1 Pa1*ent *ent Strate1 Calculation! For t%e Secon$ pa1*ent #or t%e .apane!e 1en@ >e al!o %a
it% t%e #or>ar #or>ar$ $ contr contract act"" Since Since >e are are re#er re#errin rin to t%e !a*e !a*e re!ea re!earc rc% % t%at t%at >e %a
$irst Ste5 %on
)" A*ount reHuire$ reHuire$ in US8 Pa1*ent Pa1*ent A*ount A*ount J Spot Bi$ Rate A*ount ReHuire$ in US8 .P+ ))@000@000 J )')20")5 17 & P a e
ount Re5uired Re5uired in USD & USD USD +1'+.04+1'+.04Se%ond Ste5 0a%uate the $or=ard Rate
2" For>ar For>ar$ $ rate Spot rate rate - Bi$ Bi$ Point Point')00 ')00 For>ar$ Rate ))"35 Q &"(33')00 6or7ard Rate & 11+.3+033 -he $"D Points are added 7e%ause the 7id @ as? oint.
-hird Ste5 0a%uate the re9uired 8ount
3" ReHuire$ ReHuire$ A*ount A*ount Pa1*ent Pa1*ent A*ount A*ount ' =ne =ne ont% For>ar$ For>ar$ Rate ReHuire$ A*ount .P+ ))@000@000 ' ))"3(33 Re5uired ount & USD +2'120.+2 $ourth Ste5 $ourth Ste5 Pro:t ;ade +ro E6er%ising the $or=ard 0ontra%t 0ontra%t
5" Prot A*ount A*ount ReHuire$ ReHuire$ – En$in En$in A*ount A*ount ReHuire$ ReHuire$ Prot US8 )@&"(57 - US8 2@)2("&2 Prot & USD (0.-4)
&"2"& 68 Pa1*ent Recei
e %a
ar$ *aret"
$irst Ste5 0a%uate the $or=ard Rate •
For>ar$ rate Spot rate - Bi$ Point')0@000 For>ar$ Rate 0"30) Q )0')0@000 6or7ard Rate & ,.3,2+ -he $"D Points are su7tra%ted 7e%ause the 7id @ as? oint.
-hird Ste5 0a%uate the re9uired 8ount •
ReHuire$ A*ount Recei
ar$ Rate ReHuire$ A*ount 68 )7&@000 ' 0"302 Re5uired ount & USD --'-40.432
19 & P a e
&"3 In
er co!t! t%an
tra$itional /an!" oreo
er t%e1 o9er /etter rate! #or t%e cu!to*er!" Anot%er rea!on >%1 >e c%o!e U/an i! #or t%e rea!on t%at t%e1 %a
%ic% i! eHui
&"3") ;%e In
In or$er to calulcate %o> *uc% prot >e are in to enerate #ro* e*terin into one1 aret@ >e %a
in #or*ula? • • •
Prot Prinicpal J u*/er o# 8a1! J ;er* 8epo!it ' 340)00 Prot 50@&7& J 30 J 0"023& ' 340 J )00 Prot "407)
&"3"2 ;%e in
In or$er to calulcate %o> *uc% prot >e are in to enerate #ro* e*terin into one1 aret@ >e %a
in #or*ula? • • •
Prot Prinicpal J u*/er o# 8a1! J ;er* 8epo!it ' 340)00 Prot )2@3(4 J 30 J 0"023& ' 340 J )00 Prot 0"2524
&"3"3 ;%e in
1" & P a e
In or$er to calulcate %o> *uc% prot >e are in to enerate #ro* e*terin into one1 aret@ >e %a
in #or*ula? • • •
Prot Prinicpal J u*/er o# 8a1! J ;er* 8epo!it ' 340J)00 Prot )@323@5&0 J 40 J 0"023& ' 340 J )00 Prot &)"(3&)
&"3"5 ;%e in
In or$er to calulcate %o> *uc% prot >e are in to enerate #ro* e*terin into one1 aret@ >e %a
in #or*ula? • • •
Prot Prinicpal J u*/er o# 8a1! J ;er* 8epo!it ' 340J)00 Prot 2@57"(4 J 40 J 0"023& ' 340 J )00 Prot 3"422(
4"0 Sue!tion! ;%ere are *an1 !ue!tion! !ue!tion! t%at >oul$ %elp i*pro
oul$ i
on >%ic% currencie! !%oul$ >e pair #or ar/itrae opportunitie!" Anot%er !ue!tion >oul$ /e to in
oul$ %elp t%e co*pan1 to *ae e9ort le!! prot in!tea$ o# %a
$a1! one! !%oul$ /e con$ucte$ >it% /an! >%o o9er %i% intere!t rate! in or$er to *ae oo$ prot out o# !uc% !%ort perio$ $epo!it" It i! al!o !ue!te$ #or t%e co*pan1 to /orro> a !u/!tantial a*ount at a lo> rate an$ in
e %a
a! $ue to u! c%oo!in a >ron $ate or price@ a !ue!tion i# >e %a$ t%e opportunit1 to $o it aain in t%e #uture!@ i! %a
%0 & P a e
;%ere are are !o *an1 in
e
e $eci$e$ to o >it% t%e in
ill !ill 1iel$ #or u!e t%e eJpecte$ prot t%at >e >ere %opin #or"
7"0 Su**ar1 an$ Conclu!ion ;%ere are !o *an1 rea!on! an$ #actor! t%at can cau!e a co*pan1 to lo!e it! *one1" *one1" E!peciall1 >%en it co*e! to >antin to enerate *ore *one1 to /oo!t t%eir po!ition@ e!peciall1 >%en t%e1 >ant to protect t%e*!el
e %i%li%te$ t%e $i9erent *et%o$! a co*pan1 can un$ertae to protect t%e*!el
tran!action! an$ one inDo> to /e *a$e *a$e #ro* #ro* t%ei t%eirr acco accoun untt >%ic >%ic% % !too !too$ $ >it% >it% a*ou a*ount nt o# 7@7 7@7&0 &0@0 @000 00"" ;%e! ;%e!e e tran!action! %a$ to /e *a$e >it% $i9erent currencie!@ >%ere a !erie! o# %e$in !trateie! %a
pa1*ent!" ;%e #or>ar$ tran!action %a
o EUR@ GBP" A#ter t%e eJecution eJecution o# all tran!action! an$ t%e co*pletion o# all outDo> an$ inDo> pa1*ent!@ >e %a
%ic% totale$ up 4@347@)()"4"
Re#erence! •
•
•
•
i!torical EJc%ane Rate! =A8A" n"$"" Retrie
>>"oan$a"co*'currenc1'%i!torical-rate!' i!torical EJc%ane Rate! =A8A" n"$"" Retrie
>>"oan$a"co*'currenc1'%i!torical-rate!' Euro FK =ption A*erican Muote! Glo/eJ" n"$"" Retrie
>>"c*eroup"co*'tra$in'#J')0'euro#JTHuote!Tlo/eJToption!"%t*loptionEJpiration40-6& ;%e E9ect! =# =# Currenc1 Currenc1 Fluctuation! Fluctuation! =n ;%e ;%e Econo*1" Econo*1" 20)3@ Auu!t Auu!t 4" Retrie
>>"in
%1 & P a e
•
•
•
•
•
•
•
•
•
Un$er!tan$in t%e I*pact o# Currenc1" n"$"" Retrie
>>"u/an"co*"au'ter*-$epo!it! Unite$ State! 8ollar )47-20)& 8ata C%art Calen$ar Foreca!t" n"$"" Retr etrie< ie
>>"tra$inecono*ic!"co*'unite$!tate!'currenc1 ForeJ ;utorial? ;ec%nical Anal1!i! W ;ec%nicaI In$icator! In
>>"in
!@ an$ tool!" n"$"" Retrie
>>"Je"co*'currenc1'jp1-japane!e-1en ;er* ;er* $epo!it!" n"$"" Retrie
>>"*one1!*art"o<"au'in
Appen$ice! •
EUR'US8 !pot price 2(t% o# arc%
%% & P a e
•
EUR'US8 !pot price call option *arc% ) !t
•
GBP'US8 !pot price 30t% o# April
•
GBP'US8 !pot price call option *arc% 2) !t
%3 & P a e
•
68'US8 !pot rate )!t o# a1 @ 20)&
•
US8'.P+ !pot rate 2&t% April 20)&
•
US8'.P+ !port rate &t% o# a1 20)&
%4 & P a e
•
68'US8 ) *ont% #or>ar$ rate
•
US8'.P+ ) *ont% #or>ar$ rate
%5 & P a e
•
US8'EUR
•
GBP'US8
•
US8'.P+
% & P a e
•
US8'68
A*erican option at t%e *one1
•
UBan ;er* 8epo!it 8epo !it
%7 & P a e
%9 & P a e
×
Report "international finance - group assignment"
Your name
Email
Reason
-Select Reason-
Pornographic
Defamatory
Illegal/Unlawful
Spam
Other Terms Of Service Violation
File a copyright complaint
Description
×
Sign In
Email
Password
Remember me
Forgot password?
Sign In
Our partners will collect data and use cookies for ad personalization and measurement.
Learn how we and our ad partner Google, collect and use data
.
Agree & close