INTERNATIONAL FINANCE MNC MEXICAN PESOS (FOREIGN CURRENCY), US DOLLAR (HOME CURRENCY)

1. Identifying and analyzing Country Risks and Import Controls

a. Identify and analyze any country risks in the foreign country you intend to sell the product.

b. Review the import controls set by the foreign country's government. Determine whether your business would be affected by trade regulations.

2. Foreign Exchange Market; Accessing Recent Exchange Rates; and Exchange Rate Determination (32 marks)

a. What bank do you plan to use to exchange the foreign currency received to your home currency? What is the bid/ask spread on a recent quotation by that bank? (State the time and date you obtained the quotation.) Explain how you will use the spot market for your business.

b. Critically explain why you would possibly need the forward market.

c. Go to www.oanda.com or any reliable currency website of your choice. Click on Currency Tools, scroll down to Historical Currency Converters, and then click on Currency Trends. Explain how the foreign currency of the country where you intend to sell the product has changed over the last month, the last three months, and the last year. d. Identify and analyze the key factors likely to affect the value of the foreign currency where you intend to sell your product over time?