THE UNIVERSITY OF MANCHESTER
国际金融代写 SECTION AAnswer ALL questions1.Identify and define the three type of exchange rate exposure.[10 marks]Compare and contrast foreign exchange
INTERNATIONAL FINANCE
15 May 2018
14:00 – 15:30
Answer ALL questions in Section A 国际金融代写
and
Answer ONE question from Section B
Electronic calculators may be used in accordance with the University regulations
PTO
SECTION A 国际金融代写
Answer ALL questions
- Identify and define the three type of exchange rate[10 marks]
- Compare and contrast foreign exchange forwards and foreign exchange futures contracts.[10 marks]
- Explain the characteristics of an interest rate swap and a currency[10 marks]
- Define country risk. What is political risk and how does itdiffer?[10 marks]
- Define the term Foreign Direct Investment (FDI) and briefly outline the eclectic paradigm.[10 marks]
SECTION B 国际金融代写
Answer ONE Question
- a) Define the Quality Spread and the Quality Spread Differential. What reasons have been advanced to explain the Quality Spread Differential (QSD)? Aside from the QSD what other motivations are there for usingswaps?[30 marks]
b) You are an interest rate swap (IRS) dealer for a large international intermediary and are required to devise a swap for two large clients. You are presented with the following information on your clients. [bps = basispoints]
| ABC plc | XYZ Corp | |
| Fixed rate | 3.75% | 4.5% |
| Floating rate | LIBOR + 25bps | LIBOR + 50bps |
i] Assume that you are benevolent [i.e. you charge no commission], that ABC plc wishes to borrow at the floating rate and XYZ Corp wishes to borrow at the fixed rate. Design an interest rate swap that shares the savings from engaging in the swap equally between ABC plc and XYZ Corp.[15 marks]
Question 6 continues overleaf PTO 国际金融代写
Question 6 continued
ii] Now assume that you quote a bid-ask spread of 3.7%-3.85%. How does this change your answer to part i] above? Briefly explain.[5 marks]
- a) On March 5th 2017, a UK MNC sold goods that were worth 750,000 AUD (Australian dollars) to a customer in Queensland, Australia. However, the UK MNC has a cash flow problem and the credit sale was allowed in order to ensure that the sales contract was won. The Australian dollar payment is expected on June 5th 2017, 3 months from now. In order to both hedge the foreign exchange risk which is associated with the sales contract and alleviate the sterling (pound) cash shortage, three strategies are under consideration by the treasurydepartment:
i)Execute a 3-months forward contract to cover the Australian dollars. An amount of pounds would be immediately borrowed from the Euro-currency market for 3-months, such that both the principal and interest payment from this deal would sum to the pound equivalent amount arising from the forward 国际金融代写
ii)Borrow an amount of Australian dollars for 3-months from the Euro- currency market,such that both the principal and interest payment from this deal would sum to the total amount of Australian dollars that will be received from the Australian customer. The principal amount would be immediately sold for pounds at the spot
iii)Borrow an amount of Euros for 3-months from a Dutch subsidiary such that the principal and interest payment would sum to the 3-months forward value of the Australian dollars. The Dutch subsidiary will lend the funds at the 3-months annualised Euro-currency interest rate of 0.6725%. The amount borrowed from the Dutch subsidiary would be immediately sold for pounds at the spot rate. The MNC expects to pay the Dutch subsidiary with the forward equivalent amount of the Australian
Question 7 continues overleaf PTO
Question 7 continued
On March 5th 2017 the relevant market rates including the 3-months forward rates, are as follows. All interest rates are annualised.国际金融代写
Foreign exchange rates
Australian dollar spot rate to one Euro 1.5861 3-months forward rate 1.5852
Euro spot rate to one pound 1.1196
3-months forward rate 1.1216
Euro-currency interest rates
3-months Euro-currency rates:
Pound 0.9675% per year
Australian dollar 1.3825% per year
Calculate the current cash flow from each of the three strategies and identify which the MNC should follow.[20 marks]
- b) Firms hedge to reduce expected taxes and to reduce the costs associated with financial distress. Discuss this statement with reference to theory and the empirical literature.[30 marks]
- “…changes in exchange rates naturally impact the cash flows of multinational firms with operations in different foreign locations, importers and exporters and even solely domestic firms through changes in the competitive environment and the terms of trade.” (Bredin and Hyde, 2011) In light of this statement, evaluate the empirical evidence on exchange rate exposure and explain the existence of the so-called exposure[50 marks]国际金融代写
- Why might firms engage in cross-border M&As? Does the evidence suggest that cross-border M&As are successful from the point of view of theshareholder?[50 marks]
END OF EXAMINATION PAPER
一个半小时
曼彻斯特大学
国际金融
2018年5月15日
14:00 – 15:30
回答A节中的所有问题
和
回答B部分中的一个问题
可以根据大学规定使用电子计算器 国际金融代写
取力器
A节
回答所有问题
1.确定并定义三种汇率敞口。
[10分]
2.比较和比较外汇远期合约和外汇期货合约。国际金融代写
[10分]
3.说明利率掉期和货币掉期的特征。
[10分]
4.定义国家风险。什么是政治风险，它有何不同？
[10分]
5，定义术语外国直接投资（FDI）并简要概述折衷范例。
[10分]
B部分
回答一个问题
6.a）定义质量价差和质量价差。提出什么原因来解释质量传播差异（QSD）？除了QSD之外，还有其他动机来使用掉期交易吗？
[30分]
b）您是一家大型国际中介的利率掉期（IRS）交易商，并且需要为两个大型客户设计掉期。会为您提供有关客户的以下信息。 [bps =基点]
ABC plc XYZ Corp
固定利率3.75％4.5％
浮动利率LIBOR + 25bps LIBOR + 50bps
i]假设您是仁慈的[即您不收取任何佣金]，则ABC plc希望以浮动利率借款，而XYZ Corp希望以固定利率借款。设计一个利率掉期，该收益掉期可分享ABC plc与XYZ Corp.之间平等进行掉期所产生的节省。
[15分]
问题6继续在下页取力器
问题6继续
ii]现在假设您报价的买卖价差为3.7％-3.85％。这如何改变您对上面第i]部分的回答？简要说明。国际金融代写
[5分]
7.a）2017年3月5日，一家英国跨国公司向澳大利亚昆士兰州的一位客户出售了价值750,000澳元的商品。但是，英国跨国公司存在现金流量问题，为了确保赢得了销售合同，允许进行信用出售。预计澳元将在距现在的3个月后的2017年6月5日付款。为了对冲与销售合同相关的外汇风险并缓解英镑（英镑）现金短缺，财政部正在考虑三种策略：
i）签订一份为期三个月的远期合同，以支付澳元。英镑金额将立即从欧元货币市场上借出，为期3个月，因此从该交易中支付的本金和利息都将等于远期合约产生的英镑等值金额。
ii）从欧元货币市场借入3个月的澳元，这样，本次交易的本金和利息将总计为将从澳大利亚客户处收到的澳元总额。本金将立即以即期汇率以英镑出售。
iii）从荷兰子公司借入3个月的欧元，以使本金和利息总和为3个月澳元的远期价值。荷兰子公司将以3个月的年化欧元货币利率0.6725％借出资金。从荷兰子公司借来的款项将立即以即期汇率以英镑出售。跨国公司希望以远期等值的澳大利亚元支付给荷兰子公司。
问题7继续在下页取力器
问题7继续
2017年3月5日，包括3个月远期利率在内的相关市场利率如下。所有利率均为年利率。
外汇汇率
澳元即期汇率至一欧元1.5861，三个月远期汇率1.5852
欧元即期汇率至每磅1.1196
3个月远期汇率1.1216
欧元货币利率
3个月的欧元汇率：
每年0.9675％
每年1.3825％
计算这三种策略中每一种的当前现金流量，并确定跨国公司应遵循的现金流。
[20分]国际金融代写
b）公司进行套期保值以减少预期的税收并减少与财务困境相关的成本。参考理论和经验文献讨论该陈述。
[30分]
8.“……汇率的变化自然会通过竞争环境和贸易条件的变化，影响在国外不同地点经营的跨国公司，进口商和出口商，甚至仅是国内公司的现金流量。” （Bredin和Hyde，2011年）根据这一陈述，评估有关汇率敞口的经验证据，并解释所谓的敞口难题的存在。
[50分]9，为什么企业会进行跨国并购？从股东的角度来看，证据是否表明跨国并购是成功的？
[50分]
考试结束
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