Hedging Strategy Analysis for Sims Metal Management The Risks Faced by Sims Metal Management Sims Metal Management (SGM) is a global Australian-based company that specializes in metal recycling‚ operates business in North America‚ Australiasia( Australia and Asia) and Europe‚ with North America being the largest market. The company’s activities expose it to the three major parts as financial risks: market risk‚ credit risk and liquidity risk. Market risks consist of interest rate risk‚ foreign
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d) change in an unpredictable manner 2. U.S. imports create a domestic demand for foreign currencies‚ and the satisfaction of this demand: a) decreases the supply of foreign currencies held by U.S. banksXX b) decreases the demand for foreign currencies held by U.S. banks c) increases the demand for foreign currencies held by U.S. banks d) increases the supply of foreign currencies held by U.S. banks 3. If a European importer can buy $10‚000 for 11‚100 euros‚ the exchange
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Foreign Exchange Hedging Strategies at General Motors: Transactional and Translational Exposures Prepared By: Danial Wahaj Khan EXECUTIVE SUMMARY: This report is based on a practical scenario solution of General motors. The report addresses the problem given in scenario which is the change in policy of hedging with detailed reasoning. The report then looks at the different available hedging instruments to the firm. Profitability of both instruments has been compared and lowest cost option was
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CURRENCY DEPRECIATION AND ITS IMPACTS Devaluation means decreasing the value of nation’s currency relative to gold or the currencies of other nations. Devaluation occurs in terms of all other currencies‚ but it is best illustrated in the case of only one other currency. Devaluation and Depreciation are sometimes used interchangeably‚ but they always refer to values in terms of other currencies and the value of currency is determined by the interplay of money supply and money demand. In common modern
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user. 2. User selects the type of currency they wish to convert. 3. User enters the amount of currency they wish to convert. 4. Currency is converted using established conversion rates. 5. Completed conversion amount is displayed for the user. IPO Chart Input | Process | Output | (Keyboard) User enters selection | Get type of foreign currency | ForeignCurrencyType (string) | (Keyboard) User enters amount | Get amount of foreign currency | ForeignCurrency (float) | Rate (float)ForeignCurrency
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Vietnam’s decision to devalue its currency by 5 per cent last week to protect itself from undervaluation of the Chinese renminbi‚ and the worried response from Thailand and other Asian countries‚ suggests the move towards global trade conflict may already be unstoppable. As one group of countries seeks to gain or maintain trade advantage by manipulating their currencies‚ the historical precedent suggests that countries that are not able to devalue will respond with trade protection‚ especially tariffs
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Zimbabwe: A worthless currency | The Economist http://www.economist.com/node/11751346/print Zimbabwe A worthless currency The local dollar is fast shrivelling away Jul 17th 2008 | JOHANNESBURG | from the print edition WITH prices doubling every few days‚ Zimbabweans now spend huge amounts of time and energy preventing their meagre cash resources from completely evaporating. Trying to catch up with galloping hyperinflation‚ now officially running at 2.2m per cent a year and at least
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CHAPTER 14 INTEREST RATE AND CURRENCY SWAPS SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMS QUESTIONS 1. Describe the difference between a swap broker and a swap dealer. Answer: A swap broker arranges a swap between two counterparties for a fee without taking a risk position in the swap. A swap dealer is a market maker of swaps and assumes a risk position in matching opposite sides of a swap and in assuring that each counterparty fulfills its contractual obligation
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assess political risk? What are its consequences? How can a firm manage political risk? What is micropolitical risk and how does it affect international business? Political risk assessment can be done as simple as conducting an online research yourself‚ or by hiring experts and consultants familiar with the host country. They are able to inform the likelihood of political change and develop possible scenarios for future political conditions. Another form of assessing political risk can be assigning
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amounts of money to the colonies. The Sugar Act was supposed to cut down the temptation for smuggled good and this was supposed to help pay for the soldiers staying in America to protect the colonist. The next act was known as the Currency Act. The Currency
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