...Samuel David Sims Jr. October 28, 2013 Intro to International Business Hyundai and Kia Hyundai aims to appeal to the conservative buyers, while Kia is sporty and targets the adventurous. There ultimate goal is to increase the small profits the continue to earn due to the market they sell to. The Korean won has appreciated against the US dollars causing their profit margins to remain small. While the objective of a company is to increase profit, for Hyundai and Kia, foreign exchange rates plays a major role in their profit margins. The automobile makers have to make decisions that will allow them to increase profit margins. While the easiest way to increase profits is to decrease cost and increase sales, the foreign exchange rate must be considered (Anglebrandt, 2008). 1. Explain how the rise in the value of the Korean currency the won, against the dollar impacts upon the competitiveness of Hyundai and Kia exports to the United States? The rise in value of the Korean currency, the won, against the dollar has a negative impact upon the competitiveness of Hyundai and Kia exports to the United States. A strong won means the value of their products sold in the United States are recorded at a lower value. Hyundai and Kia are clearly trying to increase market share by offering a low-pricing strategy to compete with automakers domestic and abroad. Here are some reasons why the rise in value of the won impacts both Hyundai and Kia: * Low Price Strategy = lower profit...
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...Goldman issue new product to bet against the Japanese stock market. Exchange-traded put warrants on Japan’s Nikkei 255 stock average Public launch depends on the price of NPWs (Nikkei put warrants) 1987, BS issued currency warrants by GECC, heavily subscribed. Selling echange-listed currency warrants made three important impressions on GS team. 1. while investors were interested in puts on the yen, puts on the Nikkei would be much more widely demanded. 2. Profits to be made from buying options (sourcing volatility) in institutional markets and resell to retail customers 3. New markets could quickly become satiated. The prices of the currency warrants fell quickly from the initial deal levels Exhibit 1 daily implied volatilities of exchange-listed yen currency warrants 1988, IFR reported the first of a series of recent Eurobonds whose redemption values at maturity were tied to the level of the Nikkei 225 stock average. Exhibit 2 Representative Nikkei-Linked Euro-Yen offerings, Dec 1989 Exhibit 3 Hypothetical Nikkei-Linked Euro-Yen Transactions Through a set of swaps, the issuer transformed its annual fixed-rate yen payments in to dollar-dominated LIBOR-based payments. At maturity, the issuer would redeem the bonds from the investor a price tied to the Nikkei. If Nikkei fell since the bonds were issued, the issuer would pay less than par to redeem the bonds. Thus, it would be as if the issuer sold bonds with final principal payments at par but...
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...SSRN Inspection UVA-F-1222 Diva Shoes, Inc. TO ACCESS THIS DOCUMENT This is a protected document. The first two pages are available for everyone to see, but only faculty members who have verified faculty status with Darden Business Publishing are able to view this entire inspection copy. Username: Submit VERIFIED FACULTY If you have verified faculty status with Darden Business Publishing, simply enter the same username that you use on the Darden Business Publishing Web site, and then click “Submit.” Please note that this is an inspection copy and is not for classroom use. Faculty Register UNVERIFIED FACULTY If you are teaching faculty and do not yet have verified faculty access with Darden Business Publishing, please click on the “Faculty Register” link and submit your information requesting verified faculty access. Buy Case Now OTHER USERS If you would like to read the full document, click on “Buy Case Now” to be redirected to the Darden Business Publishing Web site where you can purchase this and other Darden cases. If you have any questions or need technical help, please contact Darden Business Publishing at 1-800-246-3367 or email sales@dardenbusinesspublishing.com Document Id 0000-1402-5981-000059FA The protectedpdf technology is © Copyright 2006 Vitrium Systems Inc. All Rights Reserved. Patents Pending. UVA-F-1222 DIVA SHOES, INC. In April 1995, Lisa Stone ended a conversation with Benjamin Bisno, the president and ...
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...Question 1 What was the motivation to issue Nikkei-linked Eurobonds? The motivation for the European bank issuers of the Eurobonds, wasthe possibility to get U.S. dollar finance for a lower interest rate. Toachieve this, the issuer could sell the embedded put to Goldman Sachs. The profits from the put offset the difference between the 7%coupon they paid on the bonds and the desired LIBOR floating rate. The payment from the put covered the cost paid to the swapcounterparty for hedging the exposure to the Yen-Dollar exchangerate and swapping the LIBOR for a higher coupon rate. The European financial institution was left with a fully hedged U.S. dollar financing with a lower than normal coupon rate.Furthermore, due to some specific administrative regulation in Japan, the demand for these kind of coupons was high. In Japan,companies where not allowed to pay dividend out of capital gains. Moreover, dividend payments where an important factor in gaining an competitive advantage. Therefore, this bond construction allowed the Japanese life insurers (investors) to use the coupon rateto pay out dividend while still maintaining an exposure to the Nikkei. How are the puts embedded in the Nikkei-linked Eurobonds? A normal bond to Japanese institutions would pay a coupon rate lessthan 7%. The amount by which the 7% exceeded the normal couponrate can be seen as the put premium paid by the issuer. If, atmaturity, the Nikkei dropped below a pre-determined value (hencethe theoretical strike...
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...Week 2 The Foreign Exchange Market (Chapter 7) Chapter 7 Outline A. Foreign Exchange Market B. Spot Market C. Forward Market Chapter 7: The Foreign Exchange Market 1 Foreign Exchange (FX) Market Foreign exchange market allows one currency to be bought/sold for another currency ie. permits transfers of purchasing power denominated in one currency to another. Interbank market – wholesale market in which major banks trade with one another. Accounts for ~95% of foreign exchange transactions (Retail mkt . ~ 5%) Spot market – where currencies are traded for immediate delivery Forward market – where contracts are made to buy or sell currencies for future delivery Swap transactions – involve a package of a spot and a forward contract 35% 53% 12% Spot Transactions Forward Transactions Swap Transactions Chapter 7: The Foreign Exchange Market 2 Trading in Foreign Exchange Markets OTC Exchange Traded Spot exchange market: – settlement is T+2 Currency futures market: – standardised contracts for delivery at a future date Forward exchange market: – settlement is >T+2 Currency options markets: – standardised contracts giving the right to buy or sell Swap market Chapter 7: The Foreign Exchange Market 25731 International Finance 3 BIS Triennial survey Last survey was in April 2010 (next one will be conducted in April 2013) Summary findings: Global FX market turnover increased from $3.3 to...
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...Toyota in North America Donald L. Woolridge, Sr. Indiana Wesleyan University February 20, 2013 Course ADM537A Toyota in North America This paper will provide an overview and history of Toyota in general and the company’s operations in North America and its product lines specifically; share comments on the company’s organizational structure and senior management leadership style; discuss its nearest competitors – Ford, GM and Chrysler, known as the Detroit 3; share the weighted average cost of capital; provide insight in the company’s rationale/methodology for evaluating capital budgeting opportunities in North America; review the economic forecast for the industry; show the characteristics of common stock and bonds, share key financial ratios for three years, comparing to industry and nearest competitors; and in conclusion share a strong, fact-based summary of why or why not a person should make an investment in the common stock of Toyota. Historical Overview Toyota is a family-owned and operated company with very humble beginnings. Sakichi Toyoda, his son, Kiichiro Toyoda and Taiichi Ohno all played an important role in not only laying the foundation for what would become the automotive giant Toyota, but also in the development of the system that has revolutionized lean manufacturing; the Toyota Production System (TPS) (ToyotaGeorgetown.com, 2006-2013). Sakichi Toyoda invented the automated loom which ensured quality of product by stopping when threads...
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...with other human beings, despite their background, culture, language, values, or beliefs. My success hinges on my ability to relate to other people and earn their trust. This in and of itself can be an overwhelming task when dealing with other Americans. Pile on top the stresses of a hostile environment where your country is viewed as an occupier, morally and religiously at odds with the host nation, and the fact neither of you speak the other’s language. This, to some extent or another, has been a large part of my life for the past eight years in the Marine Corps. Other than making me really, really good at party games like Pictionary where you have to communicate without words, I have picked up some similarities through my experiences between the cultures I have interacted with that are shared despite geographic separation, cultural exclusivity from lack of outside influence or exchange, and prior indoctrination of biases through propaganda or limited experiences. In the following pages, I intend to discuss these similarities to assist the traveler when she or he finds themselves in a similar position. While each interaction with an individual in a foreign country may seem trivial to the average American, that may be the only American that foreigner ever comes across, thus shaping perceptions for generations in the village. An example which we will discuss later is Greg Mortensen, author of “Three Cups of Tea”, who forever changed remote villages in Pakistan. We will primarily...
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...Japanese Robotics Rough Draft Team B Heather Jones, Robert Hiser (Team Lead), George Dyakovetsky (Editor), Jerry Hornbogen, Edward (Andy) Felchak, Tricia Creek November 12, 2011 DeVry University Table of contents Contents Introduction 3 Culture of Japan 4 Overview of Japanese Robotics 9 Impact of Technology on the Culture 12 The Japanese Robot Economy 15 Japanese Robotic R & D Economy 17 Sales of Robotic Technology 18 The Workforce Economy 19 Economic Conclusion 20 Government Impacts 21 Public Projects Impact 22 Economics Impact 23 Technology Impacts 23 Moral and Ethical Consideration 24 Positive Impact 24 Negative Impact 25 Conclusion 27 References 28 Introduction Robots of any style and kind have been on people’s minds since the beginning of the technological ages. We see through time where our imaginations have expended when it comes to think about Robots and what we think they will become. We used to think of Robots as multiple armed machines that could cook eggs, pour coffee, and flip eggs. These robots would mimic human behaviors and motions. Then we see cartoons of robots that gave us dreams of robot maids and robot machines that would supply us with any food of our choice, and have it fully cooked, and delivered through a tube. However, now-a-days, we have evolved to higher technology and have even greater imaginations (Niku, 2001). Although, there is one country that surpasses all when it comes to robots and robotics...
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...Rewarded with a smile by exceeding your expectations Annual Report 2011 Year ended March 31, 2011 TOYOTA MOTOR CORPORATION Leading the way to the future of mobility A future mobility that links people with products and services Toyota's Global Vision not only calls for building better cars, but also expresses our goal of contributing to the creation of better communities. Toyota is developing new products and services for the future of mobility, with the goal of realizing practical, low-carbon mobility; new lifestyles; broad application of environmental technologies and infrastructure for safer mobility. Fruit Fruit Ever-better cars Develop vehicles that exceed expectations Enriching lives of communities Contribute to communities Contribute to the future of mobility Sustainable growth Constantly strive for the "ever-better cars" and "enriching lives of communities" goals by ensuring sustainable profitability with a long-term point of view. Trunk Stable business base Roots Toyota values The Toyoda Precepts Guiding Principles at Toyota The Toyota Way Tomorrow's environment-friendly vehicles, new business activities 2 Meeting challenging goals by engaging talents and passion Building cars that meet the needs of people in every region Toyota seeks to build ever-better cars that meet the needs of consumers and society, based on our principles of “customerfirst,” “genchi genbutsu” (onsite, handson experience) and “good quality, affordable...
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...Competition: Trade is increasingly global in scope today. There are several reasons for this. One significant reason is technological—because of improved transportation and communication opportunities today, trade is now more practical. Thus, consumers and businesses now have access to the very best products from many different countries. Increasingly rapid technology lifecycles also increases the competition among countries as to who can produce the newest in technology. In part to accommodate these realities, countries in the last several decades have taken increasing steps to promote global trade through agreements such as the General Treaty on Trade and Tariffs, and trade organizations such as the World Trade Organization (WTO), North American Free Trade Agreement (NAFTA), and the European Union (EU). Stages in the International Involvement of a Firm. We discussed several stages through which a firm may go as it becomes increasingly involved across borders. A purely domestic firm focuses only on its home market, has no current ambitions of expanding abroad, and does not perceive any significant competitive threat from abroad. Such a firm may eventually get some orders from abroad, which are seen either as an irritation (for small orders, there may be a great deal of effort and cost involved in obtaining relatively modest revenue) or as "icing on the cake." As the firm begins to export more, it enters the export stage, where little effort is made to market the product abroad...
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...true for producers of movies like Lord of the Rings. Others go global because production costs are lower overseas; this is true for most electronics firms. Still others buy from foreign suppliers; Wal-Mart and Nike are examples. Finally, banks, accounting firms, and other service companies are going global because their customers are doing so, and they must follow their customers or lose them. 27-2 (See the BOC model for data and examples of exchange rates.) From a U.S. perspective, an exchange rate tells us: a. Direct quotation: Number of dollars required to buy one unit of a foreign currency. b. Indirect quotation: Number of units of the foreign currency that can be bought with one dollar. Thus, the direct quotation for the euro in December 2005 (see the BOC model) was 1.18740, meaning that it took $1.19 to buy a euro, and the indirect quote was 0.8422, meaning that a dollar would buy 0.8422 euros. The direct and indirect quotes are the...
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...events that have occurred and have affected the Japanese market. d. The current situation in Japan, after the natural disasters and how it has affected the business world. III. Japan v United States – Cultural Differences e. Comparative study of the Japanese culture vs the U.S. culture, and its impact on the business world. f. Importance of individuals to understand the cultures, customs and traditions of the region in order to function properly. IV. Strengths and Weaknesses g. Strengths of having a business in this region. h. Possible threats in this region i. Cyber-terror threats and the advancement in technology’s affect on security. V. Reducing the risk j. Ways to reduce the regional risk. k. Possibility of unionization, and labor protection VI. Conclusion VII. Bibliography Business Forecasting for Coastal Regions: Post-Tsunami I. Introduction In early March of 2011, thousands of individuals were killed by a 9.0 magnitude earthquake and subsequent tsunami in many coastal regions, but mainly Japan. Coastal regions are unique when it comes to business in the fact that not only do they have many dangers in the way of cyber-terrorism, corporate theft, and local tradition but they also have many environmental dangers that other parts of the world are not in danger of. Despite the dangers of opening a corporation in a coastal region numerous American companies have locations in Japan; some of these...
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...9/25/2010 INTERNATIONAL FINANCIAL MANAGEMENT Fifth Edition EUN / RESNICK 7-0 Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Futures and Options on Foreign Exchange Chapter Objective: This chapter discusses exchange-traded currency futures contracts, options contracts, and options on , p , p Fourth Edition currency futures. EUN / RESNICK INTERNATIONAL FINANCIAL MANAGEMENT Chapter Seven 7 7-1 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. 1 9/25/2010 Chapter Outline (Material to be Covered in Class) Futures Contracts: Preliminaries Currency Futures Markets Basic Currency Futures Relationships Eurodollar Interest Rate Futures Contracts Preliminaries Currency Options Markets Currency Futures Options Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Options Contracts: NOT E O ti C t t Exam Material M t i l 7-2 Futures Contracts: Preliminaries A futures contract is like a forward contract: It specifies that a certain currency will be exchanged for another at a specified time in the future at prices specified today. Futures are standardized contracts trading on organized exchanges, with daily resettlement through a clearinghouse (providing guarantees) More importantly, positions can be closed (side bet?) Right A futures is different from...
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...Diversify Your Portfolio Outside the U.S. Dollar” Cole Stevenson Business Economics Missouri Baptist University When investing, knowing the economy is crucial. This paper begs the question, what does it mean to “Diversify your portfolio”? After all, that is what we have all been told our entire life. It is the first lesson one learns in every financial education class; the concept that we all need to “diversify our portfolio”, “not put all our eggs in one basket”, “have stocks, bonds, cash, and CD’s”, etc. This is the standard route to financial success and I have not come across many people who would argue that position. As a matter of fact, I would not argue that we should not diversify. Actually, my point is just the opposite. We need to have more diversity. You see, the question begs, just how diverse are all of those things? Do they not all depend on one sole currency? If I were to sell my stocks, I would get dollars in return. When I cash in my bonds, I will get dollars back. When my CD’s reach maturity, what do I get out of it? You guessed it, dollars. This points to the plain and simple fact, that we need more diversity outside of the U.S. dollar. Precious metals and foreign currencies make that possible. James Cooper wrote in the “Business Outlook”, “Since the greenback's peak in early 2002, it has dropped 35% against the euro, 28% vs. a trade-weighted basket of major currencies, and 18% vs. the currencies of all countries the U...
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...boards were primarily in Indian rupees (INR), but the loans that PFC had to take itself were often denominated in other currencies. PFC therefore found itself regularly with large foreign exchange exposures. At her last meeting in New Delhi with PFC’s deputy general manager, Rajeev Mehrotra, Kumar had learned that PFC’s current exposure was running close to INR 1,300 crore1 (about US$300 million), mostly in U.S. dollars and Japanese yen (JPY). Out of this exposure, Mehrotra was especially interested in hedging a Japanese yen loan equivalent to $100 million with a five-year tenor. Back at ICICI Bank’s headquarters in Bombay, Kumar now had to come up with recommendations for how PFC should handle this JPY exposure. Mehrotra had made it clear that he was uninterested in hearing about a full hedge for the entire exposure but that he hoped ICICI Bank could present alternative strategies that potentially were more profitable to PFC. Whatever the recommendation, Kumar’s team would have to take a view of the development of interest rates and also exchange rates for the dollar and yen. This would help them decide what to hedge, interest rate risk or exchange risk, and how much. Kumar’s recommendation would have to take all these aspects into consideration. ICICI Bank Limited Headquartered...
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