...896N1 - Multinational Financial Management The impact of the global financial crisis on the Multinational bank funding and its liquidity CandNo: 109098 Tutor: Dr Bruce Hearn, Dr Javad Izadi Zadeh Darjezi and Miss Madina Tash Date of Submission: 7th March 2013 Abstract This paper analyses the impact of the global financial crisis on the Multinational bank funding and its liquidity. In analysis of several articles, under the global financial crisis, multinational banks change their funding model to the stable wholesale funding and reduce the lending when the parent banks are financially weak. For its liquidity, multinational bank subsidiaries can rely on support from the bank group they belong to and therefore tend to hold a slightly lower liquidity. Content Abstract 1 Introduction 3 Literature Review 3 Analysis 5 Conclusion 6 Reference 6 Appendix 7 Introduction As the financial crisis existed through the fabric of the world’s financial system in the third quarter of 2007, it became clear that firm access to finance was going to be an early victim, including Multinational banks. During the local crisis, strong parent banks used their internal capital market to provide subsidiaries with capital and liquidity (Haas and Lelyveld, 2010). Domestic banks rely to a great extent on local funding, whereas an affiliate of a multinational bank can exploit both local funding possibilities and the funding capacity of its parent bank, all of which are embedded in...
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...International finance Final Exam: Essay questions Fall 2015 Instructions: Choose five questions from the list of the questions below and give it a thoughtful answer. Please formulate your answers in your own words and give references when needed. You may look up in textbooks in the library or check relevant websites to answer. Each question is to be answered fully but concisely, each answer should not be exceeding 200 words per question. The deadline to hand in the essay is January 7th, 2016 1. Describe the characteristics of a Multinational Corporation, any advantages/drawbacks, and give examples. What reasons does the author of your text give for becoming a multinational corporation? 2. Discuss the Exchange Rate, Market, and Legal/Political risks that foreign investors confront. 3. Explain the theory of Comparative Advantage, and its implication for production and trade. Are there some countries that have no comparative advantage? What happens if two countries have exactly the same skill, technology, and labor costs? How could comparative advantage explain the overseas shift of manufacturing and the outsourcing of labor? Does it provide the sole explanation, or are there other causes? (If so, discuss.) 4. Discuss the formation of the European Union, and the introduction of the Euro. Discuss the key legal and financial steps did they take to achieve the EU and enter into a common currency, and the challenges they faced (include a timeline). 5. What...
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...Chapter Exchange Rate Determination and Forecasting QUESTIONS 1. What is the difference between the ex ante and the ex post real interest rate? 10 Answer: The ex post interest rate corrects the nominal interest rate with the realized or ex post rate of inflation; whereas the ex-ante (or expected) real interest rate corrects the nominal interest rate for expected inflation. As a lender, you care about the real return on your investment, which is the return that measures your increase in purchasing power between two periods of time. If you invest $1, you sacrifice $1 1+i real goods now, where P(t) is the price level. In 1 year, you get back , where i is the P(t) P(t+1) nominal rate of interest. We calculate the real return by dividing the real amount you get back by the real amount that you invest. Thus, if rep is the ex post real rate of return and ex post real interest rate, we have 1 + r ep ⎛ 1+i ⎞ ⎜ P(t+1) ⎟ ⎠ = (1 + i ) = ⎝ ⎛ 1 ⎞ ⎛ P(t+1) ⎞ ⎜ P(t) ⎟ ⎜ P(t) ⎟ ⎝ ⎠ ⎝ ⎠ Notice that the real rate of interest depends on the realization of the rate of inflation because P(t + 1)/P(t) = 1 + π(t + 1), where π(t + 1) is the rate of inflation between time t and t + 1. For simplicity, we drop the time notation and simply write 1 + r ep = If we subtract 1 from each side, we have (1 + i) (1 + π) r ep = which is often approximated as (1 + i) (1 + π) i-π = (1 + π) (1 + π) (1 + π) rep = i – π The approximation involves ignoring the term (1 + π) in the denominator...
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...PART I Overview and Background Chapter 1 An Introduction to Multinational Finance True / False 1. 2. MNCs have investment or financial operations in more than one country. ANS: True. Because of globalization in the world's markets, a multinational financial manager is more likely than a domestic financial manager to specialize in finance to the exclusion of other fields of business. ANS: False. The multinational financial manager must be well versed in each of the business disciplines in which the MNC is involved. The domestic financial manager must be knowledgeable in several areas within finance, whereas the multinational financial manager usually specializes in a single area, such as corporate finance, investments, or financial markets. ANS: False. The multinational financial manager is likely to require knowledge of several fields within finance. The investment opportunity set is the set of investments available to the corporation; that is, the set from which the company must select. ANS: True. Types of market efficiency used to describe the performance of financial markets are allocational, operational, and transactional efficiency. ANS: False. Three types of market efficiency are allocational, operational , and informational. An informationally efficient market is one with abundant information. ANS: False. It is a market in which prices fully reflect available information. Allocational efficiency refers to how efficiently a market channels capital toward its most productive...
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...Solutions to End-of-Chapter Questions and Problems in Multinational Finance by Kirt C. Butler Second Edition PART I Overview and Background Chapter 1 Introduction to Multinational Finance Answers to Conceptual Questions 1.1 Describe the ways in which multinational financial management is different from domestic financial management. Multinational financial management is conducted in an environment that is influenced by more than one cultural, social, political, or economic environment. 1.2 What is country risk? Describe several types of country risk one might face when conducting business in another country. Country risks refer to the political and financial risks of conducting business in a particular foreign country. Country risks include foreign exchange risk, political risk, and cultural risk. 1.3 What is foreign exchange risk? Foreign exchange (or currency) risk is the risk of unexpected changes in foreign currency exchange rates. 1.4 What is political risk? Political risk is the risk that a sovereign host government will unexpectedly change the rules of the game under which businesses operate. 1.5 In what ways do cultural differences impact the conduct of international business? Because they define the rules of the game, national business and popular cultures impact each of the functional disciplines of business from research and development right through to marketing, production...
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...ACADEMIC YEAR 2013/2014 Bachelor of Science (Hons) Actuarial Science Bachelor of Science (Hons) Financial Mathematics YEAR 3 TRIMESTER 2 UKFF 3243 INTERNATIONAL FINANCE ASSIGNMENT (Question) ------------------------------------------------- ------------------------------------------------- Pick a multinational enterprise (MNE) from Table 1 below and answer ALL questions. Table 1: List of Multinational Enterprises | Acer Inc. (Taiwan) | Aeon Co. Ltd. (Japan) | Adidas AG (Germany) | Carrefour (France) | Honda Motor Co. Ltd. (Japan) | L’Oreal Group (France) | Nokia Corporation (Finland) | Panasonic Corporation (Japan) | Tesco PLC (UK) | Wal-Mart Stores Inc. (USA) | (a) Briefly describe their business operations in its home country and other foreign countries (3 foreign countries at least), as well as their financial performance over the last five years. (12 marks) (b) Analyse how changes in Balance of Payments, exchange rates and macroeconomic conditions in their home country and other host countries (3 host countries at least) where their foreign operations located could have influenced the selected MNE’s business strategies. (18 marks) (c) Explain any good business model(s) or strategies that you think a Malaysian company in the same industry could learn from the MNE you analysed. (6 marks) Citation of references and source of information (4 marks) Presentation...
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...and contribute as much of value as I can. • I see myself as a top performing employee in a well-established organization • I plan on enhancing my skills and continuing my involvement in (related) professional associations. • Once I gain additional experience, I would like to move on from a technical position to management. • In the XYZ Corporation, what is a typical career path for someone with my skills and experiences Long accustomed to playing a pivotal role in corporate expansion overseas, traditional country executives began to fall from favor in the 1980s, branded as an obstacle to the spread of globalization. Seeking to exploit the promises of worldwide communication, product standardization, and economies of scale, many multinationals reduced their country executives’ responsibility for decision making and profit and loss. Geographic prior gave way to worldwide strategic business units or product directors operating from central headquarters. In managing this transition, many companies adopted the transnational model. It held that customer needs were growing more homogeneous throughout the world, so companies should no longer duplicate their manufacturing and product development in each national market, but should instead leverage their capabilities across borders to achieve global economies, respond to local markets, and transfer best practices. To implement the model, senior executives were...
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...The OECD Guidelines for Multinational Enterprises (the Guidelines) are recommendations addressed by governments to multinational enterprises. They provide voluntary principles and standards for responsible business conduct consistent with applicable laws. The Guidelines aim to ensure that the operations of these enterprises are in harmony with government policies, to strengthen the basis of mutual confidence between enterprises and the societies in which they operate, to help improve the foreign investment climate and to enhance the contribution to sustainable development made by multinational enterprises. I. Concepts and Principles 1. The Guidelines are recommendations jointly addressed by governments to multinational enterprises. Observance of the Guidelines by enterprises is voluntary and not legally enforceable. 2. Since the operations of multinational enterprises extend throughout the world, international co-operation in this field should extend to all countries. 3. A precise definition of multinational enterprises is not required for the purposes of the Guidelines. These usually comprise companies or other entities established in more than one country and so linked that they may co-ordinate their operations in various ways. While one or more of these entities may be able to exercise a significant influence over the activities of others, their degree of autonomy within the enterprise may vary widely from one multinational enterprise to another. II. General Policies...
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...ASSIGNMENT 1 MULTINATIONAL CORPORATION To purchase this visit here: http://www.activitymode.com/product/itb-400-wk-4-assignment-1-multinational-corporation/ Contact us at: SUPPORT@ACTIVITYMODE.COM ITB 400 WK 4 ASSIGNMENT 1 MULTINATIONAL CORPORATION ITB 400 WK 4 Assignment 1 - Multinational Corporation Expansion Write a 6-8 page paper in which you: 1. Analyze how each of the three major dimensions of international finance can affect your possible venture of your MNC in your chosen new international market, including potential opportunities and risks for each dimension. 2. Examine the economic trends and impact of globalization in the chosen market and determine which of those emerging factors have potential for disruption that could affect operations. 3. Assess whether the country you have chosen maintains a fixed or a flexible exchange system and discuss how this monetary system will affect your MNC. Provide a strong rational for possible implications and drawbacks of the existing system. 4. Determine how the balance of payments will support the management of your MNC and explain how deficits and surpluses found within the country you have chosen can positively or negatively affect operations of your company. More Details hidden... Activity mode aims to provide quality study notes and tutorials to the students of ITB 400 WK 4 Assignment 1 Multinational Corporation in order to ace their studies. ITB 400 WK 4 ASSIGNMENT 1 MULTINATIONAL CORPORATION To...
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...fulfillment of B.B.A. program in Finance] Submitted to Department of Finance University of Dhaka Supervised by Shakila Halim Lecturer Department of Finance University of Dhaka Submitted by Md. Sohebur Rahman Roll: 17-055 Sec: A B.B.A.17th Batch Department of Finance University of Dhaka Date: 7th May, 2015 Letter of Transmittal 07th May, 2015 Chairman Exam Committee B.B.A. 17th batch Department of Finance University of Dhaka Subject: Submission of Internship Report on “IPO pricing of Nestle Global for the capital market of Bangladesh” Sir, I hereby, want to express my sincere gratification to submit my internship report on “IPO pricing of Nestle Global for the capital market of Bangladesh” Through the preparation of the report, I got an opportunity to apply my knowledge of B.B.A. program and to be acquainted with the practical field. I have given all the efforts to make this report a purpose serving one. I hope that you will appreciate my efforts and accept the submission of my report. Sincerely yours, Md. Sohebur Rahman Roll: 17-055 Sec: A B.B.A 17th Batch Department of Finance University of Dhaka Acknowledgement At the very beginning, I would like to express my sincere gratitude to Almighty Allah, who has given me the chance to complete my internship report in a very comfortable manner. I would like to thank and acknowledge my internship supervisor Shakila Halim, Lecturer, Department of Finance, University of Dhaka for assigning...
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...communicate, but today they can communicate with the press of a button. As our interactions with those from cultures much different than our own increases, communicating with one another creates obstacles we normally wouldn’t face when interacting with those from our own culture. This presents the peculiar problem for the business because it must train managers to effectively communicate within the constructs of different cultural norms and values. Communicating to others the importance of diversity in multinational corporations is a difficult task because it essentially involves asking others to reject the idea of their culture being superior to others. As O’Rourke (2010) points out, “failures in an overseas business setting most frequently result from an inability to understand and adapt to foreign ways of thinking and acting, rather than from technical or professional incompetence,” (p. 284). Regardless of difficulty, if a business is going to remain competitive as a multinational corporation, it is absolutely imperative that managers successfully communicate with individuals from different cultures. I chose to research multi-cultural management strategies because I understand how multi-national corporations are growing in number and size. Understanding why some are more successful in the global marketplace than...
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...Module 8 – Managing multinational operations Module 98 MANAGING MULTINATIONAL OPERATIONS8 MODULE 8 OVERVIEW Managing multinational operations Objectives At the completion of this module, you should be able to: • Ooutline the objectives of maintaining documentation for foreign trade transactions • Eexplain the key documents for a foreign trade transaction • Ddiscuss the various payment methods for international trade • Ddiscuss the characteristics of export finance and risk insurance • Ddiscuss the objectives and major tasks of current asset management • Eexplain the features of international cash management, accounts receivable management and inventory management • Ddiscuss the important differences between domestic taxation and multinational taxation. Learning resources Textbook Eiteman, Stonehill & Moffett 2013, edition 13th01, chapters 175, 17 19 and 20 and 18. Introduction This final module of the course encompasses a number of areas that are essential to any multinational finance course but have yet to be covered in this course. In particular, the module focuses on specific areas regarding the management of multinational operations. The module is essentially broken into three sections, all of which have a relevance to each other and to the other topics covered in this course. The first section focuses on the importance of foreign trade, in particular with regards to the growth potential it offers firms. More importantly, this section centres...
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...Question 1 Multinational enterprise (MNE) can be defined as a company in which it has facilities as well as other assets in one or more countries other than their home country. These companies usually have offices and/or factories in various countries where a centralized headquarters is used for global management. Trade union is an association consisting of members whereby their membership is has to be made up of mainly workers. Protecting and improving the interests of its members in the workplace is one of the trade union’s aims. Most of the trade unions are independent of any employer. Nevertheless, trade unions attempt to develop close working affiliations with employers. This can occasionally take the form of a partnership agreement between the trade union and the employer that categorizes their common interests and objectives. The purposes of trade unions are to negotiate agreements with employers on conditions and pay, discuss main changes to the office such as great scale unemployment, concerns with employers, discuss their members, complement their members in grievance and disciplinary meetings, deliver their affiliates with legal and financial advice and provide education facilities and certain consumer benefits such as discounted insurance. Four characteristics of Multinational Enterprise (MNE) that give trade union cause for concern are labor negotiations, offshore outsourcing or offshoring, insourcing and the actions of...
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...Fundamentals of Multinational Finance, 4e (Moffett) Chapter 1 Current Multinational Challenges and the Global Economy Multiple Choice and True/ False Questions 1.1 The Global Financial Marketplace 1) Which of the following firms are NOT considered to be multinational enterprises (MNEs) even if they have operations in more than one country? A) for-profit companies B) not-for-profit organizations C) non-government organizations (NGOs) D) all of the above may be considered MNEs Answer: D Diff: 1 Topic: 1.1 The Global Financial Marketplace Skill: Recognition 2) "BRIC" is a term coined in 2001 to refer to a group of countries at about the same stage of advanced economic development. The BRIC countries are ________. A) Belgium, Romania, Italy, and Canada B) Brazil, Russia, India, and China C) Britain, Romania, Israel, and Colombia D) Brazil, Russia, Italy, and Chile Answer: B Diff: 1 Topic: 1.1 The Global Financial Marketplace Skill: Recognition 3) According to the authors, which of the following groups or securities are at the "heart" to the global capital markets? A) debt securities issued by governments B) bank loans and corporate bons C) equity securities D) derivative securities Answer: A Diff: 1 Topic: 1.1 The Global Financial Marketplace Skill: Recognition 4) ________ are the largest markets in the world. A) United States equity markets B) European debt markets C) Global currency markets D) Chinese export markets Answer:...
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...2.1.9 EVALUATING AND CREATING THE MULTINATIONAL ENVIRONMENT MEANING OF MULTI NATIONAL CORPORATION Multinational Corporation - MNC' A corporation that has its own facilities and other assets in at least one or two countries. Such companies have offices and/or factories in almost different countries and usually they have a centralized head office where they co-ordinate the global management. In other words an enterprise operating in several countries but managed from one (home) country is known as a multinational corporation. Generally, any company or group that derives a quarter of its revenue from operations i.e., outside of its home country is considered a multinational corporation. Multinational corporations (MNCs) are huge industrial organizations....
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