International Finance Project

selects one foreign country/region (from American perspective) and its currency (note some countries have dollarized so have no their own currencies) to work on the project.

(If you have interest to work on two countries and currencies, ideally you please pick one key currency and one less popular currency. Less developed countries and regions, mostly in Asia, Africa, South America, and Eastern Europe have unique business and investment opportunities. It will be interesting and rewarding to gain knowledge in their currencies, economies, financial markets and business environment).

50. You have to indicate information sources for each part of the project.

Part I (five questions corresponding to five chapters for a total of 70 points):

1. Country and economy overview (macro level). Please be brief (ideally less than one page and absolutely no more than two pages). (12 points)

1) Choose country or region of your interest (other than USA or a dollarized country/region). Provide basic information about its economy and globalization status.

• Use your own discretion and creativity in identifying and summarizing relevant information. Find relevant index of assessment and measurement.
• For example, level of economic development, industry sectors and comparative advantage, status and stage of globalization, membership of world organization, Fortune 500 company presence, and major multinational firms, on openness.

2. International Monetary system. (10 points)

• 1. Exchange rate regime (fixed vs. floating), and specifically one of the 10 classifications.
  2. Major currency events in this foreign country/region. (Please be brief. Bulletin points preferred)
• For example, on July 21, 2005, the Chinese government and the Peoples Bank of China officially changed the value of the Chinese yuan (or renminbi, RMB) and also changed the regime from fixed rate (pegged to US dollar) to basket of currencies peg. BBC basket, band, and crawl

3. Balance of Payment (absolutely NO copy and paste). Table summary preferred. (15 points)

1) BOP numbers. Find the most recent year BOP statistics on: (6 points)

1. 1. Current Account: goods import/export, service import/export
   2. Financial Account
   3. Official Reserves
2. The most recent 10-year BOP situation (deficit, surplus, or balanced). (3 points)
3. The top three international trade partner (both import and export). And the top three goods/services to be imported and exported. (3 points)
4. Capital mobility and capital control (can be a general description or as detailed as Exhibit

3.8 in the textbook). (3 points)

International Finance

4. Business basics (micro level). This can be descriptive/ anecdotal or quantitative/analytical.

Please be brief (ideally less than one page and absolutely no more than two pages). (11 points)

1. 1. What is the basic business ownership structure? (public vs private enterprise, publically traded or not, the role of other stakeholders: family, union, government and financial institutions, and so on). (4 points)
   2. Which theory/model about goal of management prevails in that country/region? SWM (stockholder wealth maximization) model, SCM (stakeholder capitalism model), or mixed, why? (3 points)
   3. Structure of corporate governance, such as Corporate Governance Regimes (Exhibit 4.6) and Good Corporate Governance Practice (Exhibit 4.7). (3 points)
2. Financial Markets. (22 points)
3. 1. Basic currency information - official name, abbreviation, symbol, and countries /regions using the currency. (3 points)
   2. Exchange rate to US dollar at two time points - the beginning of last year and this year. Please provide and indicate both the direct quote and indirect. (6 points)
   3. The direction and magnitude of change in exchange rate (which currency appreciated or depreciated from beginning to the end of last year, and by what percentage?) Please show formula and calculation. (7 points)
   4. The exchange rate change in the past 10 years (Chart with brief description preferred). (3 points)
   5. Compare the above 10-year exchange rate with the 10-year BOP date from question 3.2. Is there any correlation? (3 points)