finance of business-A
Order Description
You are required to:
1- Discuss and evaluate the factors that influence exchange rates.
2- Explain how each of the following conditions will affect the value of the krank, holding other things equal.

a) UK inflation has suddenly increased substantially, while country K’s inflation remains low.
b) UK interest rates have increased substantially, while country’s interest rates remain low. Investors of both countries are attracted to high interest rates
c)The UK income level increased substantially while country K’s income level has remained unchanged.
D)The UK is expected to impose a small tariff on goods imported from country K

3- Aggregate all of these impacts to develop an overall forecast of the krank’s movement against the pound
Order Description

You are required to:
1- Discuss and evaluate the factors that influence exchange rates.
2- Explain how each of the following conditions will affect the value of the krank, holding other things equal.

a) UK inflation has suddenly increased substantially, while country K’s inflation remains low.
b) UK interest rates have increased substantially, while country’s interest rates remain low. Investors of both countries are attracted to high interest rates
c)The UK income level increased substantially while country K’s income level has remained unchanged.
D)The UK is expected to impose a small tariff on goods imported from country K

3- Aggregate all of these impacts to develop an overall forecast of the krank’s movement against the pound
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Assignment/coursework general submission requirements
Written work
• Your student identification number must be clearly stated at the top of each page of your work.

• Each page must be numbered.

• Where appropriate, a contents page, a list of tables/figures and a list of abbreviations should precede your work.

• All referencing must adhere to School/Institutional requirements.

• A word count must be stated at the end of your work.

• Your course, year of study and the relevant module must be included as a “footer” on each page.

• Appendices should be kept to the minimum and be of direct relevance to the content of your work.

• All tables and figures must be correctly numbered and labelled.

• If there is calculation involved, you are required to provide workings. Otherwise, no credit will be awarded.

Module:BAC6017Finance of International Business Level 3 – Coursework1(Aggregate effects on exchange rates)

Word limit: 3,000 words

Assume that the United Kingdom invests heavily in government and corporate securities of Country K. In addition, residents of Country K invest heavily in the United Kingdom. Approxi¬mately £10 billion worth of investment transactions occur between these two countries each year. The total pound value of trade transactions per year is about £8 billion. This information is expected to also hold in the future.

Because your firm exports goods to Country K, your job as international cash manager requires you to forecast the value of Country K’s currency (the “krank”) with respect to the pound.

You are required to:
1) Discuss and evaluate the factors that influence exchange rates.
(40 marks)
2) Explain how each of the following conditions will affect the value of the krank, holding other things equal.
i) UK inflation has suddenly increased substantially, while Country K’s inflation remains low.
ii) UK interest rates have increased substantially, while Country K’s interest rates remain low. Investors of both countries are attracted to high interest rates.
iii) The UK income level increased substantially, while Country K’s income level has remained unchanged.
iv) The UK is expected to impose a small tariff on goods imported from Country K.
(40 marks)
3) Aggregate all of these impacts to develop an overall forecast of the krank’s movement against the pound.
(20 marks)

(100 marks in total)

Reference:
Madura, Jeff and Roland Fox (2014), International Financial Management, 3rd Revised Edition, Cengage Learning

Note:Oneprinted copy is to be submitted through I-ZONE and an electronic copy to be sent to Turnitinby due day.
Assessment Criteria
Standard assessment regulations apply.You must reference your work as required by Cardiff Metropolitan University regulations.

Thisis assessment One and contributes 50% of the overall module assessment.

Learning Outcomes. On successful completion of this assessment, the student will:
• Demonstrate an awareness of economic issues and the interaction of exchange rates;
• Demonstrate a critical insight into the determination of exchange rates;
• Apply key factors which affect exchange rates to multinational corporate case with specific concern for future cash flows;
• Critically evaluate the main principles of exchange rates forecasting which helps decision making for multinational corporates.
ASSESSMENT GRADING

%
90 – 100 A quite exceptional and outstanding answer, providing insights which would not be available publicly, and would, with some editing, be publishable. In addition to the features of the next section, this range is distinguished by superior organisation economic use of language and totally comprehensive, given the conditions of the exercise.
80 – 89 An answer which demonstrates an excellent understanding of the question and of the complexity of the issues involved. There is a sound basis of relevant factual knowledge and/or the theoretical issues involved. Most of the important issues are dealt with in a detailed, specific and systematic way. There is either some measure of original thinking in the answer or an accurate and comprehensive account is given in a way which demonstrates understanding, for example by structuring the material such that it could not have been based just on reproduction of lecture notes and programme material. Evidence of creativity, critical approach, and wide reading beyond the core subject matter.
70 – 79 As above but a slightly less consistently excellent level. Alternatively, this range of mark may be given for an answer which, while not having original insights, gives comprehensive and accurate coverage of the issues at a high level throughout the answer, without significant omissions or errors.
60 – 69 The answer shows evidence of ability to maintain a personal position in original terms and shows a command of the accepted critical positions with some attempts at innovation. It is lively and highly articulated, giving evidence of knowledge, enthusiasm and control. There is demonstration of a clear understanding of the question and a grasp of the complexity of the issues involved, and there is a sound basis of relevant factual knowledge and/or theoretical issues involved, with few significant errors
50 – 59 The answer shows evidence of an ability to defend on the basis of evidence and personal position in relation to an issue or aesthetic. It shows evidence of evaluation of information and synthesis of generalisations from it. There is clear evidence of selection of appropriate material, logical structure and clear argument. The answer demonstrates an understanding of the major or basic issues in the question, and there is a basis of factual knowledge and/or relevant theoretical issues.
40 – 49 The answer demonstrates an understanding of the major or basic issues in the question. There is evidence of a satisfactory level of analysis and judgement including a statement of criteria. Evidence of selection of appropriate material, logical structure and clear argument are also present. The overall framework is sensible and accurate.
30 – 39 Significant errors may be present. The answer is less well planned compared to above, or poorly planned, with little clear train of thought or development of argument. There is some evidence of ability to collate information and construct generalisations, but with limited comment on the weighting of evidence or opinion.
20 – 29 The answer may meander around the general area of the question, but with very little convenience or structure. There is no evidence of criticism, synthesis or evaluation.
10 – 19 Some notes relevant to the question, but without coherence.

1 – 9 Notes of little relevance to the question or only an introductory paragraph and one or two scattered thoughts
Graduate Skills assessed: 1a, 1b, 1d, 3c, 4a, 4b, 6a, 6b, 6c, 6d, 7b & 7c.

Skill Category Skill Elements to be developed
1. Communications a. Written
b. Presentation: verbal and written
c. Listening and interpretation
d. Reading and interpretation
2. Numeracy a. Calculation/estimation
b. Understanding conventional numerical data.
c. Handling and interpreting date.
3. Technology a. Use/application of ICT
b. Electronic communications
c. Information retrieval and manipulation
4. Learning and Study a. Personal time management
b. Learning/study/search
c. Learning technology
5. Interactive Group a. Team working
b. Taking initiative
c. Leadership/managing others
6. Problem Solving a. Identifying key issues
b. Planning
c. Managing tasks
d. Creativity and originality
7. Professionalism a. Ethical evaluation
b. Responsibility
c. Entrepreneurship
d. Self reflection evaluation
e. Career/career development awareness.