The book is called Multinational Business Finance edition 14 By Eiteman, Stonehill, and Moffett (Chapter 7 mini case questions)

1. What were the expectations - and the fears - of the South Korean exporting firms that purchase the KiKos?

2. What is the responsibility of a bank that is offering and promoting these derivative products to its customers? does it have some duty to protect their interests? who do you think was at fault in this case?

3. If you were consultant advising firms on their use of foreign currency derivative products, what lessons would you draw from this case, and how would you communicate that to your clients?

I need help answering all of this questions.

time value estimates how intrinsic value may ch for the better prior to maturity. CASE KiKos and the South Korean Won? That possibility arises from afundamental needs became the sale and promotion of Knock national law that is not written tener hedging option (KiKos). extremis down in any law book: In the locals win. South "Bad Trades, Except in Korea," by Floyd N Knock-outs (KiKos) The New York Times, April orris, Knock-ln not Korean exporters 2,2009 Many South Korean manufacturers had suffered falling man particularly in 2006, 2007 and into 2008 were gins on sales for years Already operating in highly competi South Korean happy with exchange rate trends. The tive markets, the appreciation of the won had cut further but steadily, won (KRW) had been appreciating, slowly into their margins after currency settlement.Asseeni major for years against the US. dollar. further A,the won had traded in a narrow range for years Bu problem for This was a sales Korean manufacturers, as much of their that was little comfort the difference between KRW100m dollar was exports to buyers paying in as and continued US. dollars As the and KRW 930 to the dollar was a big chunk of margin. in fewer to each dollar resulted in fewer Korean banks Kika Korean Korean won and nearly all of their had promoting won. Korean banks, costs were as a way managing this currency Knock-In in an effort to service these Knock-out (KiKo) was a complex option structure,which copyright c2015 Thunderbird School of Global Management, Arizona State University. All rights reserved.This case was p Professor Michael H.Moffett for the purpose of classroom discussion only