I would like to solve three questions 3.5 which i solved ,but incorrect because I compared IDR with JPY, but task is for IDR with NZD and JPY with NZD. that's only that Q 3.5 need to be answer in both word doc and excel and can get the data from the Eikon

part 4.2(part3and part 4) you check the marking criteria for both parts what it should be.

FINA701 ICF S2 2020 Group Activities Tasks Choose a New Zealand company involved in international business. The presentations must include answers to the following questions regarding the chosen company. You must use Eikon database to complete this assignment. Group presentation 1 (10%) covers Part 1 and Part2. Deliverables: o In-class or online group presentation, maximum 10 minutes long. 0 Power point slides - submit on Blackboard at least 24 hours before the presentation Part1. Company introduction, foreign involvement, and strategy. 1.1 What is the nature of the company's business? 1.2 Explain the degree of the foreign involvement. What importance does the company appear to place on international business? What percentage of sales revenues and income does the company derive from their foreign operations? How many countries does the company operate in? Is its foreign activity increasing or decreasing? 1.3 What are the strategic motive(s) for this company to invest overseas? 1.4 What is the company' s competitive advantage in global markets? Part 2. Country risk analysis. 2.1 Choose a foreign country that is relevant for the company (based on the discussion in Part I). A country would be relevant if the company currently has sales or operations in that country or might consider in future to expand sales or operations in that country. Explain the relevance of the chosen country. Your team is hired to perform country risk analysis and to make recommendations regarding international presence and expansion of the company in the chosen country. 2.2 First, your team needs to provide an assessment of the country risk for the chosen country and to discuss opportunities and risks of the company's international presence and expansion based on the country risk analysis. 2.2.1 In addition to economic and political indicators, country risk analysis must include assessment of the country's currency risk (volatility of the exchange rate relative to NZD) and discussion how the value of the country's currency is determined (Le. currency exchange rate regime). 2.3 Second, your team needs to provide recommendations as to whether you believe the company should enter or expand presence in that country and by what means they should do so (e.g. exporting, licensing, acquisition, green-eld operations). Your recommendations must be supported with details and insights gleaned from your analysis. Data sources: Eikon Thomson Reuters (see instructions @ Blackboard) The company's web-site, Annual Reports, press releases, business news, etc. Dr. Olga Dodd FINA701 ICF S2 2020 Additional resources for country risk analysis: https://www.nzte.govt.nz/en/export/market-research/?region=new-zealand http://data.imf.org IMF data portal http://databank. worldbank.org/ World Bank databank http://stats.oecd.org/ OECD Statistics Portal http://www.economist.com/ http://www.bea.gov/ U.S. Bureau of Economic Analysis (BEA) http://www.unctad.org/ http://www.transparency.org http://www.bis.org http://www.bloomberg.com/ http://www.moodys.com http://www.standardandpoors.com http://www.countryrisk.com http://www.cia.gov/library/publications/the-world-factbook/index.html http://www.beri.com http://www.milkeninstitute. org http://www.opic.gov Marking criteria for group presentations can be found in the Study guide (p.8). Group presentation 2 (20%) covers Part 3, Part 4, and Part 5. Deliverables: In-class or online group presentation, maximum 10 minutes long (10%) o Power point slides - submit on Blackboard at least 24 hours before the presentation o Excel file with data and calculations (10%) o must include all data, snapshots of data from Eikon, charts, and all calculations o Excel file - submit on Blackboard at least 24 hours before the presentation. Part 3. Foreign exchange rates. 3.1 Because the company is involved in international business, its operations and profitability are likely to be affected by the changes in the value of foreign currencies (currency risk). Which foreign currencies do you expect to be the most relevant for the company (based on the nature of foreign involvement discussed in Part 1)? Explain. For these two foreign currencies perform the following analysis (New Zealand - home country): 3.2 Obtain from Eikon monthly exchange rates for the two foreign currencies (NZD price of the foreign currency), from 01 January 2005 to 15 July 2020 (or the latest available). Include financial chart and summary statistics. Comment on the trends. 3.3 Using data from question 3.2, calculate foreign currency monthly returns. Provide summary statistics and comment on the numbers obtained. 3.4 Calculate the percentage changes in the value of the foreign currencies against the NZ dollar in 2019 (from 01 January 2019 to 31 December 2019) and in 2020 (from 01 January Dr. Olga DoddFINA701 ICF S2 2020 2020 to the latest date available) (Home country New Zealand). Comment on the numbers obtained. 3.5 Obtain from Eikon the latest available spot quotes for the foreign currencies and calculate bid-ask spreads. Include the snapshots of data from Eikon. Compare and comment on the numbers obtained. 3.6 For the two foreign currencies (relative to NZD) obtain from Eikon the latest spot rates and 1month. 6month, and 1year forward rates. Calculate midrates using bid and ask rates. Using mid-rate, calculate 1-month, 6-month, and 1-year forward premium] discount for the foreign currencies relative to NZD (New Zealand 7 home country). Include the snapshots of data from Eikon. Interpret the obtained numbers and comment on market expectations about the value of the foreign currencies in the coming year. 3.7 What are the factors that affect the value of the two foreign currencies (relative to NZD)? (Tips: Read business news to get an idea about relevant factors; consider demand and supply for the currency, fundamental economic factors, and government intervention (if relevant)). Part 4. Foreign exchange exposure. 4.1 What are the expected effects of the value of NZ dollar on the company's operations and profitability, given the nature of company's business? (positive and negative effects of a strong and a weak NZ dollar). 4.2 Estimating foreign exchange emosure of the company. Foreign exchange exposure of the company can be estimated as the relationship between the company's returns and the foreign currency returns (see He and Ng (1998) and Dominguez and Tesar (2006)). You need to estimate (1) total company' 5 foreign exchange exposure and (2) company's foreign exchange exposure relative to the market. (1) Total foreign exchange exposure is measured as the value of [33m estimated from the following regression: _ total Tit 30 + Ext rxt + Sit where m is the stock return of company i at time t; m is the foreign currency return at time t. Coefficient 'mf measures unconditional relationship of the changes in exchange rates and stock returns. (2) Foreign exchange exposure relative to the market is measured as the value of g; estimated from the following regression: Tit 2 50 + irmt + ixrxt + 5i: where Fit is the stock return of company i at time t; m: is the return on market portfolio at time 5; r3" is the foreign currency return at time t. Coefficient g measures relationship of the change in exchange rates and stock returns after conditioning on the market return. Steps: - Obtain from Eikon monthly stock prices and calculate monthly logarithmic returns: P Tit = lnPt = 11109 111(Pt1) tl Dr. Olga Dodd FINA701 ICF S2 2020 Obtain monthly market index prices and calculate monthly logarithmic market returns as above. Use monthly foreign currency exchange rates for the two chosen currencies from question 3.2 to calculate monthly logarithmic currency returns: ERt Txt = MERt-1 - = In(ERt) - In(ERt-1) Obtain monthly trade-weighted exchange rate index (TWI) from the RBNZ's website. Convert the indirect exchange rate to direct (NZD per foreign currency) and calculate monthly logarithmic TWI returns as above. Estimate the coefficient estimates from the two regressions above for the two chosen foreign currencies and TWI. Interpret your findings. What do your estimations show about the company's foreign exchange exposure? Part 5. Risks and risk management. 5.1 Investigate the company's foreign currency risk management policies and practices from its Annual Reports, especially the "Financial Risk Management" section. How would you evaluate the company's approach to foreign currency risk management? 5.2 What are the risks faced by the company? How can the company mitigate the risks? Data sources: Eikon Thomson Reuters (see instructions @ Blackboard) The company's web-site, Annual Reports, press releases, business news, etc.. Reserve Bank of New Zealand web-site: https://www.rbnz.govt.nz/statistics/bl References Dominguez, K. M., & Tesar, L. L. (2006). Exchange rate exposure. Journal of international Economics, 68(1), 188-218 He, J., & Ng, L. K. (1998). The foreign exchange exposure of Japanese multinational corporations. The Journal of Finance, 53(2), 733-753. Marking criteria for group presentations can be found in the Study guide (p.8). Dr. Olga DoddEikon Points Points Points Points Excel Task N Task Data, charts, snapshots app Calculations Presentation Presentation, % Excel file file, % Part 3 3.1 justify the choice of two foreign currencies 0.35 5.0% 3.2 monthly exchange rates - discuss the trends time series (NZD price of FC); chart CHTF summary statistics 0.35 5.0% 0.60 6.0% 3.3 monthly returns use time series from 3.2; report chart returns; summary statistics 0.20 2 9% 0.60 6.0% exchange rates at the beginning and end of the year 3.4 change in value in 2019 and 2020 (or YTD); the change in value from Eikon CHTF the change in value 0.20 2.9% 1.00 10.0% 3.5 bid-ask spreads - compare and comment bid and ask quotes; include snapshots Quote bid-ask spreads 0.30 4.3% 0.50 5.0% mid rates; forward forward premium/discount - interpret numbers premium/discount (six in total = 3.6 and comment on market expectations spot and forward rates; include snapshots Quote two FC x three maturities) 0.70 10.0% 1.80 18.0% discuss factors that affect the value (focus on 3.7 your FC) 0.70 10.0% Part 4 4.1 discuss expected effects of the value of NZD 0.70 10.0% 4.2 (1) monthly stock and market returns monthly stock and market price data CHTE log returns 1.00 10.0% 4.2 (2) currency retuns use time series from 3.2 log returns 0.50 5.0% Convert indirect rate to direct 4.2 (3) monthly TWI rate from the RBNZ's website. TWI rate from the RBNZ's website (NZD per FC); log returns 1.00 10.0% estimate regression (1) - THREE regressions in to 4.2 (4) Total foreign exchange exposure log returns from 4.1 (1) - (3) TWI 1.50 15.0% estimate regression (2) - THREE Foreign exchange exposure relative to the regressions in total (two FCs + 4.2 (5) market log returns from 4.1 (1) - (3) TWI) 1.50 15.0% interpret the regression estimation results - the 4.2 (6) company's foreign exchange exposure estimation results from 4.1 (4) and 4.1 (5) 2.10 30.0% Part 5 discuss the company's foreign currency risk 5.1 management policies company's annual reports 0.70 10.0% discuss risks and how to mitigate (based on your 5.2 GP1 and GP2) company analysis for GP1 and GP2 0.70 10.0% TOTAL 7.00 10.003.5 Obtain from Eikon the latest available spot quotes for the foreign currencies and calculate bid-ask spreads. Include the snapshots of data from Eikon. Compare and comment on the numbers obtained The spot quote for Japanese Yen v/s Indonesian Rupiah is shown below in the snippet from the Eikon database. 1 Japanese Yen is traded at 140.54 Indonesian Rupiah at the time of this snapshot. The bid-ask rates for these currencies is also shown in the snippet below where the Bid Price is 140.54 whereas the Asking Price is 141.05. Done Assel Classes " Cour Updated 28-Sap-2020 22:07 Rafresh JAPANESE YENINDONESIAN RUPIAH FX CROSS RATE Bid: 140.5400 Ask: 141.0500 1-R 25-Sep-2120 21:54 (kickinkihl Quote News Chart High: B - Low. A-- Close; B 140.5400 Overview New Overview Price Chart Contributor/ Broker Data FX Polls 360 Menu OVERVIEW CHART - HISTORICAL BROKER DATA Dieplay flange. 25-Jun- 2020 - 20-Sep-2020 + Sclerl Continuter (AR) JPYIDA B 140.54 Instrument Contributo 240.54 IULL PHON Locatio FENICS MD LOW Ack LON 140.6030 140.9700 16.00 25-Son-20120 Thaw All CONTRIBUTOR DATA 4 Select Location Update View Instrument Contributor Location The bid-ask spread can be calculated by the formula: Spread % = Ask-Bid / Ask *100% = 141.05 - 140.54 / 141.05 * 100% = 0.36% There is very little difference between the ask and bid price, only at 0.36%. This little difference between the bid and ask spread indicates that the fluctuation between the ask and bid price is very low historically showing a normal demand or exchange between these two currencies. A higher value of the spread % would indicate that one currency is preferred over the other