Subject is Investment Management

QUESTION ONE [20] Read the following summary about Rich & Poor Company and answer the required questions. Rich & Poor is a multinational company with businesses in several countries around the world. Rich & Poor frequently has expenditures and receipts denominated in various foreign currency, including purchases and sales of finished products, subsidiary dividends, and investment operations in various countries. Rich & Poor uses a variety of input resources in the production and purchase most of these input resources from foreign suppliers. To finance its operations, Rich & Poor uses a variety of funding sources, such as commercial paper, term debt, and lines of credit from major international commercial banks. The company invests any surplus cash in securities of various types and maturities, the value of which is subject to fluctuations in interest rates. Rich & Poor has a credit division, which provides financing to customers wanting to purchase its product. Overall, Rich & Poor faces several risks. Based on the above discussion, recommend and justify the risk exposures that should be reported to Rich & Poor risk management team. 201