1. Minimum 150 words
Foreign exchange rate fluctuations and instability make for a difficult investment environment, yet more tools are being developed to help investors mitigate this risk. Research one of these tools and explain how it might help a new investor to take advantage of global markets. In your response, please include at least two professional sources to support your analysis.
2. Minimum 150 words
Based on the current global econocy, do you believe that the next engine of global economic growth will come from developed or emerging economies? Which country in particular do you think will be the star performer in the next ten years and why?
3. Foreign Investment: Minimum 500 words
- Estimate your exposure to the exchange risk.
- Compute the variance of the dollar value of your property that is attributable to exchange rate uncertainty.
- Discuss how you can hedge your exchange risk exposure and examine the [possible] consequences of hedging.
Support your analysis by referencing and citing at least two credible sources, in addition to the textbook, that you used to assist you in your responses.
4. Diversification: Minimum 700 words
What are the advantages of creating a diversified international portfolio? What are the risks? In answering the questions, critically assess the risk factors that an international investor faces and how diversification serves to mitigate risk. Then discuss how the theory of an optimum international portfolio (from Chapter 15) informs your analysis. Support your analysis by referencing and citing at least three credible sources other than the course textbook.
The attached Tata Motors case study provides some insight into the difficulties that firms in developing countries face when they try to export their products and services. For this assignment, select an industry or a specific export from a developing country that faces particularly challenging barriers to entry into foreign markets. Describe the industry, explain how it could help the developing economy, and analyze the nature of the barriers that it faces in foreign markets. You will likely need to rely on extensive external sources for your research. In addition, consider the Tata Group Case Study and the questions that accompany it as you analyze and explain the challenges that your selected industry or export presents. Support your analysis by referencing and citing at least three credible sources.