Question
This is for help with the final project. For multinational businesses, transaction exposure can cause the devaluing of a contract due in a later time
This is for help with the final project.
For multinational businesses, transaction exposure can cause the devaluing of a contract due in a later time period and change the overall profit or loss of a project.
Needed: A presentation to incorporate the knowledge gained and information presented in the previous milestones to explain how a company may break into global enterprise by gaining a new contract, whether the organizational structure and business objective play a part in the company's entrance to international trade, how transaction and other exposures play a part in the success or failure, types of domestic and international financing options for the business or project, and the changes or effects of the balance of payments and trade balance between the two countries and how each may cause fluctuations of interest rates, exchange rates, and the overall cost of the venture. Include an example of purchasing power parity, types of possible arbitrage, and how this company will decide if the potential profits are worth the risks.
This final project should include all concepts covered in this course, extreme detail about historical trade between China and the United States, and your opinion of what the future may hold between these two countries. Utilize as many details as possible into this project, butdo not just copy the same information previously submitted.
I have attached the rubric.
Topics covered in the course include:
Module One identifies the types of opportunities, forms of ownership, and strategies multinational companies use to expand globally or begin business within a foreign country. The module also examines the various strategies used to enter global trade, the risks companies endure, and how the size and objectives of the organization may make a difference to the outcome.
Module Two will explain the relationship between the trade balance and rise and fall of interest rates as well as define the balance of payments and accounts used to create transactions. This module also examines the duties of a foreign exchange dealer and whether the utilization of a dealer is beneficial to a multinational organization.
Module Three will provide knowledge and examples of tools multinational organizations use to finance international trade. These may be in the form of conventional financing, factoring of accounts, and counter trade. While investigating methods of financing, this module compares the components and use of effective financing rates versus annual percentage rates.
Module Four will introduce the concepts of purchasing power parity and the law of one price, which is the concept that a basket of goods purchased in one country will cost the same in another country, even with a variance in exchange rates. This is a very important concept because fluctuations in cross exchange rates may allow individuals and businesses to create earnings based on the variance of exchange rates as their money is invested and traded around the globe. This module also examines the Fisher effect and how nominal interest rates and the required real rates of return are computed to allow for anticipated rates of inflation.
Module Five will move further into purchasing power parity by defining and providing an example of the various approaches used. These approaches utilize the balance of payments, supply and demand, and the relative price for a portfolio of bonds. Currency market intervention will also be examined to understand why and how the government intervenes to control the rise and fall of inflation and unemployment rates by making decisions that ultimately increase or decrease the value of the currency.
Module Six will provide insight into the foreign exchange market, how transactions are completed, and factors that may change the exchange rate from one currency to another. Direct quotes are those from the domestic country, while indirect quotes of exchange are those from a foreign country and currency. Cross, bid, and ask rates are all components of the foreign exchange market and may lead to fluctuations in the exchange rate. This module also examines the ins and outs of foreign exchange.
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