Question
I WILL RATE THE ANSWER IF THE ANSWER IS CORRECT You are the finance manager at Unilever, a multinational consumer goods company. Unilever's products are
I WILL RATE THE ANSWER IF THE ANSWER IS CORRECT
You are the finance manager at Unilever, a multinational consumer goods company. Unilever's products are available in around 190 countries and it owns over 400 brands, with a total turnover of 51 billion euros, and thirteen brands with sales of over one billion euros around the world. As an MNE, Unilever strive to take advantage of imperfections in national markets for products, factors of production, and financial assets:
Answer the following questions based on this information by providing explanations in proper sentences.
1- Explain why the global financial market place is a combination of complex risks for Unilever.
2- Explain why imperfections in the market for products translate into market opportunities for Unilever and why the company is better able to exploit such competitive factors
3- The complexity of exchange rate regime choices faced by many emerging market countries pose challenges for all MNEs. Discuss which regime Unilever would prefer.
4- Explain how the primary accounts of the balance of payments reflects fundamental economic and financial activities across borders for Unilever
5- Discuss the categories of institutional participants that operate in the forex market, indicating which category Unilever would belong to.
6- Unilever finance department uses forward contracts to manage its forex risks and to speculate in these markets. Explain whether they should use covered or uncovered positions in the context of interest rate parity.
7- Unilever finance department trades some derivative products very frequently for speculating on commodities rather than hedging their specific risks. Explain if they are more likely to use forwards or futures.
8- Unilever finance department occasionally uses some tailor-made derivative products to hedge their specific risks. Explain if these are forwards or futures contracts.
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