Preview

Option and Blades

Satisfactory Essays
Open Document
Open Document
264 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Option and Blades
MiniCase 2 Blades, Inc. Chap 5 1. If Blades uses call options to hedge its yen payables, should it use the call option with the exercise price of $0.00756 or the call option with the exercise price of $0.00792? Describe the tradeoff.

2. Should Blades allow its yen position to be unhedged? Describe the tradeoff.

Chap 6

1. Did the intervention effort by the Thai government constitute direct or indirect intervention? Explain.

2. Did the intervention by the Thai government constitute sterilized or nonsterilized intervention? What is the difference between the two types of intervention? Which type do you think would be more effective in increasing the value of the baht? Why? (Hint: Think about the effect of nonsterilized intervention on U.S. interest rates.)

Chap 8

1. What is the relationship between the exchange rates and relative inflation levels of the two countries? How will this relationship affect Blades’ Thai revenue and costs given that the baht is freely floating? What is the net effect of this relationship on Blades?

Chap 10 1. What type(s) of exposure (i.e., transaction, economic, or translation exposure) is Blades subject to? Why?

2. If Blades does not enter into the agreement with the British firm and continues to export to Thailand and import from Thailand and Japan, do you think the increased correlations between the Japanese yen and the Thai baht will increase or decrease Blades’ transaction exposure?

3. Do you think Blades should import components from Japan to reduce its net transaction exposure in the long run? Why or why

You May Also Find These Documents Helpful

  • Good Essays

    Eco 316 Week 1 Essay

    • 715 Words
    • 3 Pages

    23) Which of the following was an important consequence of the regulatory reforms that follo...…

    • 715 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Empire In Transition

    • 718 Words
    • 3 Pages

    Explain the importance of the series of crises from the Sugar Act through the Coercive Acts. How did each crisis change colonial attitudes toward the mother country?…

    • 718 Words
    • 3 Pages
    Good Essays
  • Good Essays

    3.___ The North American Free Trade Agreement (NAFTA) is advantageous for Canada because manufacturing jobs have been sent to Mexico where labour is cheaper.…

    • 982 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    2. Describe at least three risks a company might face if it participates in global trade. (1-3 sentences. 3 points)…

    • 515 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Envo Factors

    • 376 Words
    • 2 Pages

    • Analyze the influence of the Foreign Corrupt Practices Act of 1977, as well as the influence of local, national, and international legislation.…

    • 376 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Sport Obermeyer

    • 466 Words
    • 2 Pages

    3. How should Obermeyer management think (both short-term and long-term) about sourcing in Hong Kong versus China?…

    • 466 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    2. Japan plays a major role as an exporter of FDI. As a recipient of FDI,…

    • 965 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    Aspen Case Study

    • 658 Words
    • 3 Pages

    1) What are Aspen Technology’s main exchange rate exposures? How does Aspen Tech’s business strategy give rise to these exposures as well as to the firm’s financing need?…

    • 658 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    International Business

    • 498 Words
    • 2 Pages

    4. The implications of Japan’s economic stagnation for the benefits, costs, and risks of doing business in this nation are huge. There is no growth in the country due to the people with money being retired…

    • 498 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Public policies often alter the costs and benefits of private actions. Why is it important for policymakers to consider both the direct and indirect effects of public policies? Select a particular public policy with which you are familiar and discuss two positive and two negative aspects of that policy. What goal do you think the policy makers were trying to achieve in effecting that policy? Do you believe it was successful? Why or why not?…

    • 876 Words
    • 3 Pages
    Good Essays
  • Good Essays

    sher-wood case

    • 438 Words
    • 2 Pages

    3. Which firm activities would be impacted by offshore outsourcing? How different were these influences between 2007 and 2011?…

    • 438 Words
    • 2 Pages
    Good Essays
  • Good Essays

    7. Describe economic conditions across East Asia in 1960. How did they compare economically to other developing nations at the time, like Zimbabwe and Iraq?…

    • 546 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Creative Thinking

    • 399 Words
    • 2 Pages

    Discuss the actions of at least two specific countries or regions which changed their policies on global trade and investment, and contrast them with the previous policies.…

    • 399 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    closing case 8

    • 391 Words
    • 2 Pages

    3. How did the entry of Wal-Mart into the Japanese retail sector benefit that sector? Who lost as a result of Wal-Mart’s entry?…

    • 391 Words
    • 2 Pages
    Satisfactory Essays
  • Better Essays

    Thailand’s economy was growing fast in the early 90s, however the government and the banks were not aware of the bubble economy so the Asian Financial Crisis occurred and Thailand’s economy and livelihood was in a bad position. Before 1997, the economy of Thailand grew rapidly - 9% per year on average. Investors from all over the world inject capital in Thailand. However, a bubble economy was created. As the spending of each person in Thailand increased, the suppliers or the producers tend to produce more products to meet the demands of various products ranging from real estates to necessities. Assets prices were raised to a very high level. Unfortunately, there was an unbalance in the supply and demand. The prices dropped to a significant low level. Banks and other financial institutions also lend money to without serious consideration of risk. Individuals and firms had to prolong the length of repaying debts. Later, the government adopted a float exchange rate system. In January 1998, it resulted in the fact that the baht reached a point of 56 bahts to the U.S. dollar. (CRS Report - Table A1. Exchange rate). Moreover, there was a slump of 75% in 1997. Even Finance One, the…

    • 1014 Words
    • 5 Pages
    Better Essays