International Finance - 1098 Words

1. The modes of international trade that car markers use are export and Joint venture. Export is the most common mode used by car markers. This mode is been carefully approached by users. Using this exporting approach it causes low risk as automobile companies, they do not put any of their capital in jeopardy. This help to protect against any losses or prevent the loss to be devastating. If a company is undergoing a decrease in its exporting, it can typically diminish the exporting or end the exporting business at a minimal cost. The second mode is joint ventures. Joint venture is a step that is mutually possessed and worked by two or more firms. Numerous firms enter the foreign market by taking part in a joint venture with firms that†¦show more content†¦The third strategy is option. An option contract allows the user to sell or buy currency and it helps to protect its user who uses it. Inside an option contract it is been divided into 2 part, known as the put and call options. The user can buy or sell the currency at a certain price. The price is also known as the strike price or exercise price. Every option has an expiry date for it. The two appropriate strategies for the German car makers will be forward contract and option contract. A forward contract helps save the currency risk. For example Volkswagen needed 5 million SGD to buy a product. But the company only holds EUR therefore they need to exchange to SGD in order to buy it. However the spot rate could be low and wouldn’t meet that 5 million SGD even if they trade their EUR. This is when forward contract come in and allow to lock in the exchange rate so that they can meet the demand of 5 million SGD which they do not have to wait for the exchange rate to meet their demand wanted. This strategy helps to save a lot of time for the company. After the exchange rate was lock in they can then negotiate with the bank to get the money. The next strategy is option. For example if the Volkswagen receive revenue in term of USD. The revenue they earn will be converted to EUR from USD. However during the currency risk, EUR may strengthen. If USD is been converted toShow MoreRelatedInternational Finance Exam4417 Words   |  18 PagesInternational finance FIN 412 Exam #2 MC:  Examples of single-currency interest rate swap and cross-currency interest rate swap are:   A.  fixed-for-floating rate interest rate swap, where one counterparty exchanges the interest payments of a floating- rate debt obligations for fixed-rate interest payments of the other counter party B.  fixed-for-fixed rate debt service (currency swap), where one counterparty exchanges the debt service obligations of a bond denominated in one currency forRead MoreSources Of Finance For Synergy International Limited1627 Words   |  7 Pagessources of finance for Synergy International Limited to enable the company to invest in new machinery, at a cost of approximately  £225,000, in order to manufacture mobile phone covers for the Samsung S7 Edge. Also included in this report, are the information needs of the different decision makers. 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Different areas of effect of globalization†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..5 4. International finance†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..9 5. The impact of globalization on international finance i. Relationship between globalization and international finance†¦Ã¢â‚¬ ¦....12 ii. Globalization and its impact on developing countries†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Read MoreEssay on finance case vanguard international growth830 Words   |  4 Pagesï » ¿ Issues 1. Explain why an individual investor might want to invest in an international growth fund? 2. Describe the risk associated with making an investment in an international growth fund. Identify the risks that would be common to domestic an international funds, and those risk that would be unique to an international fund. 3. 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