Better Business Cases
Guidance on Using the Five Case
Model: An Overview
28 February 2014
This document was created using material provided by Her Majestys (HM) Treasury in the
United Kingdom, the Welsh Government (Llywodraeth Cymru) and
Most strategists agreed that a good understanding of the business
environment is an essential requirement for effective strategic
According to many strategists, there are at least four important
12. Selling Currency Call Options. Mike Suerth sold a call option on Canadian dollars for $.01 per
unit. The strike price was $.76, and the spot rate at the time the option was exercised was $.82.
Assume Mike did not obtain Canadian dollars until the opti
1. Forward versus Futures Contracts. Compare and contrast forward and futures contracts.
ANSWER: Because currency futures contracts are standardized into small amounts, they can be
valuable for the speculator or small firm (a commercial banks forward cont
10. Speculating with Currency Call Options. Randy Rudecki purchased a call option on British pounds
for $.02 per unit. The strike price was $1.45 and the spot rate at the time the option was exercised
was $1.46. Assume there are 31,250 units in a British
33. Triangular Arbitrage. You are given these quotes by the bank:
You can sell Canadian dollars (C$) to the bank for $.70.
You can buy Canadian dollars from the bank for $.73.
The bank is willing to buy dollars for 0.9 euros per dollar.
The bank is willin
53. Forces of Covered Interest Arbitrage. As of now, the nominal interest rate is 6% in the U.S. and 6%
in Australia. The spot rate of the Australian dollar is $.58, while the one-year forward rate of the
Australian dollar exhibits a discount of 2%. Assum
51. Forces of Triangular Arbitrage. You obtain the following quotes from different banks. One bank is
willing to buy or sell Japanese yen at an exchange rate of 110 yen per dollar. A second bank is willing to
buy or sell the Argentine peso at an exchange
49. Cross-rate and Forward Rate. Biscayne Co. will be receiving Mexican pesos and today and will
need to convert them into Australian dollars. Today, a U.S. dollar can be exchanged for 10 Mexican
pesos. Also, an Australian dollar is worth one-half of a U.
47. Profit from Triangular Arbitrage. The bank is willing to buy dollars for 0.9 euros per dollar.
It is willing to sell dollars for .91 euros per dollar.
You can sell Australian dollars (A$) to the bank for $.72.
You can buy Australian dollars from the b
42. Profit from Covered Interest Arbitrage. Today, the one-year U.S. interest rate is 4%,
while the one-year interest rate in Argentina is 17%. The spot rate of the Argentine peso (AP) is
$.44. The one-year forward rate of the AP exhibits a 14% discount.
45. IRP Relationship. Assume that interest rate parity (IRP) exists. Assume this information is
provided by todays Wall Street Journal.
Spot rate of Swiss franc = $.80
6-month forward rate of Swiss franc = $.78
12-month forward rate of Swiss franc = $.81
38. Change in the Forward Premium Over Time. Assume that interest rate parity exists and
will continue to exist. As of today, the one-year interest rate of Singapore is 4% versus 7% in
the U.S. The Singapore central bank is expected to decrease interest r
35. Impact of Arbitrage on the Forward Rate. Assume that the annual U.S. interest rate is currently
6 percent and Germanys annual interest rate is currently 8 percent. The spot rate of the euro is $1.10
and the one-year forward rate of the euro is $1.10.
27. Currency Straddles. Reska, Inc., has constructed a long euro straddle. A call option on euros with an
exercise price of $1.10 has a premium of $.025 per unit. A euro put option has a premium of $.017 per
unit. Some possible euro values at option expir
28. Currency Straddles. Refer to the previous question, but assume that the call and put option
premiums are $.02 per unit and $.015 per unit, respectively. (See Appendix B in this chapter.)
a. Construct a contingency graph for a long euro straddle.
17. Price Movements of Currency Futures. Assume that on November 1, the spot rate of the British
pound was $1.58 and the price on a December futures contract was $1.59. Assume that the pound
depreciated during November so that by November 30 it was worth
For the Fisher Effect to hold, what must happen if the real rate of
interest is 2%, the rate of inflation is 11.5% and the nominal rate of
interest is 14%?
Borrowing will be attractive forcing the nominal interest rate to rise to 14.5%
The real rate of re
FIN 465 (F) / Page 1 of 4
BRITISH BUSINESS STUDIES DEGREE PROGRAMME B.A (HONS) IN FINANCE
FIN 465 : INTERNATIONAL FINANCIAL MANAGEMENT
FINAL EXAMINATION : AUGUST 2002 SESSION This paper consists of EIGHT
(8) questions. Answer any FOU
International Financial Management
Project Paper Assignment
You will write an original paper on an international financial management topic. The paper
should be short and focused. Create an idea for your own MNC to conduct international
business. Your ide
Small Business Dilemma
Multinational Capital Budgeting by the Sports Exports Company
1. Describe the capital budgeting steps that would be necessary to determine whether this
proposed project is feasible, as related to this specific situation.
Jim needs t
Line and Staff Relationships
Line and staff managers are in an international and interdependent relationship with one another.
nteractions are involved in their day-to-day relationships of staff advice, guidance and servicesto
the line. The line manager
STRATEGY EVALUATION AND CONTROL
Strategy Evaluation and Control Involves:
Establishing the standards of performance to be measured.
This involves determining the achievement of organizational
Monitoring and measuring the organizations ac
Issue 28/July 2013
Making the most
of your people
In this issue: Looking forward p 2/
Performance management p 4 /Data analytics p 8 /
Corporate culture and performance p 12 /
Flexible working p 16 /Workforce demographi
Peter F. Drucker:
A business is not defined by its name, statutes, or articles of incorporation. It
is defined by the business mission. Only a clear definition of the mission and
purpose of the organization makes possible clear and re
Abschlussarbeit WS 2013/2014
Hochschule fr Technik und Wirtschaft Aalen
Studiengang Internationale Betriebswirtschaft
zur Erlangung des Bachelorgrades "Bachelor of Arts
Factors of Success for Share Repurchases
STRATEGIC THINKING IN STRATEGIC MANAGEMENT
Mohd Khairuddin Hashim
The importance of strategic thinking as a requisite for effective strategic management has
recently generated considerable interest. The literature in fact suggests that the in
UNIVERSITI UTARA MALAYSIA
COLLEGE OF BUSINES
BWFF5043 INTERNATIONAL FINANCIAL MANAGEMNT
The course provides a brief overview of the international financial management function.
Then, it explores the international financial environment th
Principles for Strategy Implementation:
1. The strategy implementation process should be tailored to the organizations
overall requirement and direction (vision, mission, objectives, and selected
2. The implementation