Free

5 Practice Problems - Assignment Example

Comments (0) Cite this document
Summary
This is done with due compensation to the owner though without consent of the owner. Under insurance risk covers, expropriation of assets is classified…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.4% of users find it useful
Assignment 5 Practice Problems
Read TextPreview

Extract of sample "5 Practice Problems"

An example of a political risk is d. both answers a and b are correct. Both expropriation of assets and adverse change in tax rules fall under political risks
Expropriation of assets
This is simply a situation where the government takes over a privately own business with the aim of benefiting the public. This is done with due compensation to the owner though without consent of the owner. Under insurance risk covers, expropriation of assets is classified under political risks that include confiscation, nationalization, and other foreign government actions (Meridian Finance par 1).
Adverse change in tax rules.
Factors that do affect business besides market based effects include government decisions or changes. Among decisions that the government can make changes on include taxes, and other factors. Depending on the government it can be adverse or favourable.
2. Suppose Mexico is a major export market for your U.S.-based company and the Mexican peso appreciates drastically against the U.S. dollar. This means that
c. your domestic competitors will enjoy a period of facing lessened price competition from Mexican imports.
If the US dollar is strong against another currency, it leads to increased demand of imports as prices go down. This inturn weakens export as foreign goods appear to be expensive outside the country. Importers prefer strong local currency while exporters prefer weak local currency (Econedlink par 11)
3. Suppose that Great Britain is a major export market for your firm, a U.S.-based MNC. If the British pound depreciates against the U.S. dollar,
c. to protect U.K. market share, your firm may have to cut the dollar price of your goods to keep the pound price the same.
For an export business based in the US the ideal situation would be if the dollar weakens, this makes it attractive for foreigners to buy goods from US, but if it appreciates it, makes foreign goods seem expensive. To balance this fluctuation the company needs to cut the dollar price to match the prices in pounds (Econedlink par 11).
4. Suppose that you are a U.S. producer of a commodity good competing with foreign producers. Your inputs of production are priced in dollars and you sell your output in dollars. If the U.S. currency depreciates against the currencies of our trading partners, b. your competitive position is likely worsened.
When the dollar appreciates, this makes foreign goods seem cheaper and this improves their position in the market, but when the dollar depreciates the price of foreign goods seem expensive and this may probably worsen the position of foreign business (Econedlink par 11).
5. Suppose your firm invests $100,000 in a project in Italy. At the time the exchange rate is $1.25 = €1.00. One year later the exchange rate is the same, but the Italian government has expropriated your firms assets paying only €80,000 in compensation. This is an example of
b. political risk
It does not matter the exchange rate, what counts is the fact that the government has taken over a private own business. The government does this without the owner’s consent but there must be compensation (Meridian Finance par 1).
6. What major dimension sets apart international finance from domestic finance?
d. All of the above
The three major dimensions that set apart international finance from foreign finance include: Foreign exchange and political risks, Market imperfections and expanded opportunity set.
Works cited
Meridian Finance. Political Risk Insurance, Expropriation Of Assets. 2014. http://www.meridianfinance.com/political_risk.html 12 June 2014
Econedlink. Exchange Rates And Exchange: How Money Affects Trade.
2014 http://www.econedlink.org/lessons/index.php?lid=342&type=student 12 June 2014
Upenn.edu Chapter 1 Globalization And The Multinational Firm Suggested Answers To End- Of-Chapter Questions. 2014, http://finance.wharton.upenn.edu/~bodnarg/courses/nbae/IFM/Chapter1.pdf 12 Jun. 14 Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Assignment 5 Practice Problems Example | Topics and Well Written Essays - 250 words”, n.d.)
Assignment 5 Practice Problems Example | Topics and Well Written Essays - 250 words. Retrieved from https://studentshare.org/business/1649756-assignment-5-practice-problems
(Assignment 5 Practice Problems Example | Topics and Well Written Essays - 250 Words)
Assignment 5 Practice Problems Example | Topics and Well Written Essays - 250 Words. https://studentshare.org/business/1649756-assignment-5-practice-problems.
“Assignment 5 Practice Problems Example | Topics and Well Written Essays - 250 Words”, n.d. https://studentshare.org/business/1649756-assignment-5-practice-problems.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Assignment 5 Practice Problems

Problems - questions

...? 20th March Problems – questions Section A Question SWOT analysis is a planning method that is used to evaluate strengths, weaknesses, opportunities and threats that are faced by a business. Being undertaken also to evaluate a product, industry or business location, SWOT is used to identify internal and external factors that affect a business. Internal factors involve strengths and weaknesses while external factors are opportunities and threats (Kerin 19). Another use of SWOT analysis is to create a recommendation after undertaking a survey. Question 2 Marketing entails communicating the benefits of a product to the customers. Being focused at advertising a product or a service, marketing is imperative in creating...
4 Pages(1000 words)Assignment

Sleeping Problems of the Elderly

...) At what time do you get up in the morning ? 2) At your age you mustn’t probably be busy doing household work when you are awake , so what is it that keeps you busy most of the time ? 3) How often do you talk to the other family members during the course of the day about yourself ? 4) Do you feel bored during the afternoon hours ? 5) At what time do you take your lunch ? 6) Over a period of one week how often do you consider taking a nap after lunch ? 7) At what time do you take your afternoon snacks ? 8) Do you have any specific nighttime rituals like reading , listening to music , singing etc. ? 9) Do you ...
4 Pages(1000 words)Assignment

Week 5

...Upholding ethics at Siggy clear energy Topic # submitted Upholding ethics at Siggy clear energy Introduction The success of any company starts with the morals it aims to uphold inside and outside the company. An ethically upright company is the start of a working and progressive society; the lack of ethics call for failure in the near future to any foundation (Posters, 2003). In order to start with the positive changes in terms of services and products, a checkup must be done in accordance with the company’s most important individual: its employees. This, however, does not only apply to the staff or the managers and supervisors alone—this checkup on ethics must be practiced by everyone in the company in order for progress...
2 Pages(500 words)Assignment

Research problems

...Research problems Research problems Q RAID storage arrays The effective data storage capacity of each Raid level usually varies due to there difference in architecture, tolerance and performance. Generally the amount of effective data storage capacity can be calculated as an expression of the number of drives used in assembling the array. For example, the effective data storage capacity for RAID level 0 =1-(1/n) where n=0. Effective data storage capacity for Raid level 0= 6TB. Raid level 5=4/5 X 6TB=4.8 TB, Raid level=5/6X6= 5TB while the data storage capacity of RAID level=9/10X6=5.4 TB. The number of disks that can fail before data is lost permanently...
1 Pages(250 words)Assignment

Applied paramedic practice

...goals that I want to achieve in the short term. Over the next few weeks, I would like to focus on the pathophysiology principle so that I can improve my assessment skills. This is really important to me because it will help show where I am academically right now. Also, I want to be able to identify ECG and all of the paramedic drugs. These skills will come in handy in the future. 5. The applied paramedic practice topic is a comprehensive approach to everything that we have learned over the last three years. The integration of the areas of the curriculum helps me to assess patients and prescribe them with the right type of treatment. This is not only beneficial from the patient’s point of view, but it...
2 Pages(500 words)Assignment

5

...be inaccessible to the people who cannot afford the software and equipments for the voting process (Haupt, 2008). Needless to say, people who cannot use the computer facilities may not acquire their privileged to vote. This creates inequality problem. Virus can immensely damage the electronic voter system. Though the server can be safeguarded using some operating systems and antivirus, the personal computers may not be susceptible to virus infection, which may affect not only the computer but also its web browser (Jefferson et al, 2004). This may contravene the privacy of the secret ballot, and diminish the impartiality of the election process. References Jefferson, D., Rubin, A. D., Simons, B., & Wagner, D. (2004). A...
2 Pages(500 words)Assignment

Problems

...Problems Question 6 A four year financial project has estimates of net cash flows shown in the following table: Year Pessimistic ($) Most Likely ($) Optimistic ($) 1 14000 20000 22000 2 19000 25000 30000 3 27000 30000 36000 4 32000 35000 39000 It will cost $ 65,000 to implement the project, all of which must be invested at the beginning of the project. After the fourth year, the project will have no residual value. Using the most likely estimates of the cash flows, conduct a discounted cash flow calculation assuming a 20 percent hurdle rate with no inflation. ( You may use either excel or a paper and pencil calculation). What is the discounted profitability of the project? The discounted cash DCF=CF1/(1+r)1 +...
2 Pages(500 words)Assignment

Week 5 practice problems

...Week 5 Problems Hypothesis Ho: The average sleeping and waking cycle length does not vary significantly from 24 hours. H1: The average sleeping and waking cycle length varies significantly from 24 hours. t critical= 1.86 t calculated= (25-24)/ sqrt (10/8) = 0.894 Since t calculated is less than t critical, do not reject the null hypothesis. Therefore, I am 95% confident that the average sleeping and waking cycle length does not vary significantly from 24hrs even if one is not exposed to the usual pattern of sunlight. To get the level of confidence, I subtract the level of significance from 100. Therefore, (100-5) = 95. I am 95% confident about the results. The central line represents 0.5...
2 Pages(500 words)Assignment

Evidence-Based Practice Project

...Evidence-Based Practice Project al Affiliation Evidence-Based Practice Project Rogers diffusion of innovation theory is significantly helpful in determining the adoption of specific clinical behaviors or the components that will need more effort if diffusion is to occur. Diffusion of innovation refers to a process that comes about when people adopt a new practice, philosophy or idea among other issues (Fahlman, 2012). This theory assumes that an initial few people are ready to accept new ideas or practices and implement them. However, after a certain time, the idea or practice is diffused amongst the population to a point known as the saturation point....
3 Pages(750 words)Assignment

Problems

...Chapter 4 Problems: ECO 201 Kinghorn QUESTION a) A figure illustrating the imposition of a binding price floor in the cheese market is drawn below. P1 and Q1 show the price and quantity when there is no price floor respectively. When the floor is set at Pf, a price greater than P1, Q2 becomes the quantity demanded. However the quantity supplied is Q3. Thus the surplus of cheese is given by Q3-Q2. b) In cases where demand is elastic then the farmers’ complaint that their total revenue declined if correct. This is because with elastic demand, the % reduction in the quantity would exceed the % rise in the price leading to the fall in total revenue. c) Producers will benefit while taxpayers will lose if the government takes...
3 Pages(750 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Assignment on topic Assignment 5 Practice Problems for FREE!

Contact Us