Multinational Finance

FIN 417 – A – Multinational Financial Management
Fall 2018
Dr. Nataliya Zaiats
COUNTRY AND BUSINESS ANALYSIS PROJECT
The objective of the project is to use concepts learned in class to assess 1) country risk
and 2) retrospectively monitor spot foreign exchange rates over a continuous period of
time, 3) review the currency exposure of that country’s firm or MNC*, 4) present the
information to the reader in a concise and clear manner, and 5) practice public speaking
skills through the presentation of your country/firm and currency analysis in class. The
project will focus on a macro-assessment of a country risk with consideration to a
specific business or MNC.
* Please note that even though suggested, it is not required that the MNC you choose to
present is of the country of your choice. It may be domiciled in a different country.
In the body of the report the students will include:
1) Political risk analysis
2) Financial risk analysis
3) Visual presentation of the movements of exchange rate and the identification and
discussion of important events and trends that have impacted the movements. At least
five events have to be discussed.
 You are required to analyze at least 5 years of exchange rate movements
relative to the US Dollar.’
4) Overview of a chosen firm’s (or MNC’s) currency exposure and how changes in the
exchange rates affected the company’s currency exposure for that period.
You will produce 10 double-spaced typewritten page team report proofread for spelling
and grammatical errors.
The oral presentation is limited to 10 minutes and needs to be accompanied by
PowerPoint slides.
Articles referred to in support of the analysis should be cited at the end of your written
report, using the APA standard.
Country Choice:
You are free to choose any country. However, if you pick a country from the EU zone,
you are required to analyze at least two years of the currency movement prior to Euro
introduction.
Teams:
You will work on this project in teams of about 4 students, depending on the class size. It
is the team’s responsibility to monitor that all members contribute equally to both the
written report and oral presentation of the project.
Due Dates:
 Project progress report is due on Thu, Oct 18
 Printed copies of the project final report AND presentation are due for all teams on
Tuesday, November 27 in class.
 Soft copies of the project final report and presentation are due for all teams Monday,
November 26 by midnight. Please email your work to the professor.
 Please note only one submission is allowed. Once emailed to the professor /
submitted in a hard copy, your submission is final and no further revisions are
allowed. Please do not re-send multiple copies.
Teams will present on Tue, Nov 27 and Thu, Nov 29.
Project Resources
Exchange rates
http://www.ny.frb.org/markets/foreignex.html – historical exchange rate data that may be used to
create technical charts of exchange rates.
http://www.bmonesbittburns.com/economics/fxrates – forward rates for the euro, British pound,
Canadian dollar, and Japanese yen for 1-month, 3-month, 6-momth and 12-month maturities.
These forward rates may serve as forecasts of future spot rates.
http://www.oanda.com – historical exchange rate movements. Data are available on a daily basis
for most currencies.
http://www.sonnetfinancial.com/rates/full.asp – bid and ask quotations for all major currencies.
This website provides exchange rates for many currencies. The table can be customized to focus
on the currencies of interest to you.
http://www.bloomberg.com – cross exchange rates for several currencies only.
http://www.xe.com/ict/ – real-time exchange rate quotations.
http://www.federalreserve.gov/releases – current and historic exchange rates.
http://www.bis.org.statistics/eer/index.htm – information on how each currency’s value has
changed against a broad index of currencies.
http://www.bis.org/cbanks.htm – links to websites of central banks around the world; some of the
websites are in English.
http://www.ny.frb.org/markets/foreignex.html – information on the recent direct intervention in
the foreign exchange market by the Federal Reserve Bank of New York.
http://www.ny.frb.org/research/global_economy/undex.html – exchange rate and intrest rate data
for various countries.
Effects on exchange rates
http://www.ny.frb.org – links to information on economic conditions that affect foreign exchange
rates and potential speculation in the foreign exchange market.
Country risks
http://www.cia.gov – valuable information about political risk that should be considered by MNCs
that engage in direct foreign investment.
http://www.heritage.org – interesting insight into international political risk issues that should be
considered by MNCs conducting international business.
http://lcweb2.loc.gov/frd/cs/cshome.html – detailed studies of 85 countries provided by the
Library of Congress
http://www.stat-usa.gov – access to a variety of microeconomic and macroeconomic data on
emerging markets.
http://www.duke.edu/~charvey/Country_risk/couindex.htm – results of Campbell R. Harvey’s
political, economic, and financial country risk analysis.
PROJECT GRADING CRITERIA
PRESENTATION
– High standard of professional communication during presentation /5
– Professional quality of Power Point slides /5
– All project areas well described, presented, and supported /20
o Political risk analysis /5
o Financial risk analysis /5
o Visual presentation of exchange rates and identification of important
events that have impacted the movements (at least 5 events; 5 years of
RFX movements against U.S.$) /5
o MNC and its currency exposure /5
WRITTEN REPORT
Project structure:
1) Political risk analysis /17
2) Financial risk analysis /17
3) Visual presentation of the movements of exchange rate and the identification and
discussion of important events and trends that have impacted the movements. At least
five events have to be discussed.
 You are required to analyze at least 5 years of exchange rate movements
relative to the US Dollar. /16
4) Overview of a chosen firm’s (or MNC’s) currency exposure and how changes in the
exchange rates affected the company’s currency exposure for that period. /15
Other:
– Report well written, with clear structure, proofread, edited,