Principles of International Business Finance (BUSS 5314)
Assessment 2
Study Period 2, 2017
Due at 6.00 pm, Friday, 19th May, 2017
Instructions
• The report should not exceed 3000 words. Appropriate tables and/or graphs used in the main body of the essay and the Appendix of the essay are not included in the word count limit. You should use appropriate in-text citations and references. The required presentation format is Times New Roman, 12 point font size, with text double-spaced. Clearly indicate your word count at the end of your essay.
• Your electronic submission will be used for a plagiarism check. You are not allowed to simply copy from other sources or other people. If you do so, your case will be forwarded to the Academic Integrity Office for investigation. Further penalties may apply.
• Students can choose to work in groups of up to three people (between 1 to 3 persons) in this course. Once you decide to work on a group basis, it is your responsibility to participate and collaborate well with other group members. Each member of the same group will receive the same mark for the group work submitted.
• An electronic copy in word.doc (rather than pdf) format with a ‘cover sheet’ attached at the front should be submitted via the ‘Learnonline’ facility by the due date.
If you choose to work in groups, your assignment should be submitted only once by one nominated group member. The full name and student ID number of each group member is required to be clearly included in the attached ‘cover sheet’.
• A standard penalty of 10% of the total marks applies for each day or part day for late submission. The only exception to this is if you are granted an extension prior to the due date by your Course Coordinator, for legitimate reasons based on supporting documents. More details about submission can be found in the Course Outline under the section of ‘Further Assessment Information’.
Background
Suppose that you are required to provide advice on international financial derivatives to the CEO of a particular listed company in Australia that incorporates the following key aspects:
1. Explain why this listed company needs to consider international financial derivatives based on their current situation.
2. Identify what the potential foreign exchange risks are to this company. Suggest how to manage those risks.
3. Design two practical plans/schemes involving international financial derivatives for this listed company.
4. Discuss the benefits and limitations of accepting these two practical plans/schemes.
Requirements
You are required to write a professional report (maximum 3000 words) in which you apply relevant or necessary knowledge learnt so far from the course BUSS 5314. A pure theory report or general writing will not meet the purpose of this assessment.
Your report should be compiled as follows:
• Title page
• Executive summary: (suggested 400 words)
a. Choose one publicly-listed company that you are interested in (one suggested source of Australian listed companies is the ‘Australian Securities Exchange’ (ASX) website (http://www.asx.com.au/)).
b. Briefly introduce the company’s background, major products or services, location, major market advantages and challenges in both the domestic and international environments, and any economic or finance issues that are relevant to discussion in the Middle section.
• Introduction: (suggested 400 words)
Set an interesting ‘scene’ by highlighting the main issue and discuss your motivations for writing this report.
• Middle section: (suggested 1700 words)
This is the main body of your report. You need to fittingly address ALL the key aspects outlined in the ‘Background’ section. Within this middle section, you can use your own subheadings such as Current Situation Analysis, Potential Foreign Exchange Risk and Management, and Practical Plan.
a. Collect relevant data including current financial data/reports and ratios on the company you chose from databases, including the websites of the Australian Securities Exchange (ASX), Australian Bureau of Statistics (ABS) and Reserve Bank of Australia (RBA), and the ‘Thomson One’ financial database from the UniSA Library databases section.
b. Based on the data collected, organise empirical evidence in tables and/or graphs where appropriate to justify your arguments.
c. Address key aspects 1 and 2 outlined in the ‘Background’ section under the unique contexts of the company.
d. To address the aspect 3 outlined in the ‘Background’ section, select only two international financial derivatives from the following list:
1) Currency Forwards
2) Currency Futures
3) Currency Swaps
4) Currency Options
Demonstrate how these two financial derivatives work (the procedures) in the real word by providing examples with real data (numbers/figures) you can collect. Only under circumstances where despite your efforts the data (numbers/figures) is/are still missing or unattainable, are you allowed to use conceived/assumed data (numbers/figures) to secure the completion of the task.
Important notes: You should not copy any examples used in the textbook or lecture notes. If you do so, you will receive zero marks for this section.
e. To address key aspect 4 outlined in the ‘Background’ section, compare two practical plans/schemes using the financial derivatives, and provide discussion on your own thinking about their benefits and limitations.
• Conclusions: (suggested 500 words)
Summarise your overall suggestions and discuss possible limitations.
• References: UniSA Harvard style.
• Appendix: Include any necessary materials that support your report.