353FIN International Finance

IMPORTANT – PLEASE READ THIS WARNING REGARDING PLAGIARISM

Assessments must be all your own work and must not have been copied in part or in whole from any other source, such as books or the internet, or from other students’ work. If you wish to use another author’s exact words in a short quotation this must be clearly marked up in inverted commas with the exact source given, including page number, so that the reader can clearly see which words have been copied and are not your own. Just quoting references used at the end is not sufficient.

Please see your course handbook or the Faculty website for more information on referencing and university regulations on plagiarism.

Instructions for Submission

Hard copy (in form of Microsoft Word or compatible format) should be submitted to the SHAPE (Please contact reception counter on 9/F, VTC Counter). For soft copy, please upload to Moodle. You should always enter your name and complete all other details on a coursework cover sheet and also ensure that your student ID number and the module code (i.e. 353FIN) are on the front page of the coursework itself. Cover page must be completed and attached on the first page of your submission.  Students’ work without a cover sheet will not be marked. PDF version is not accepted.

Prepare a report for the following cases:

Question 1

Cathay Pacific Airways Ltd., the largest airline in Hong Kong airline, suffered billions of dollars in losses from fuel-hedges in the past two years including 2015 and 2016. Discuss why Cathay Pacific did hedging and you should critically evaluate the situation with supporting arguments. (20 marks)

Question 2

Your company is an internet company in China and thinking about raising capital by initial public offering in 2017 either in Hong Kong Stock Exchange or Nasdaq in US. Compare and contrast the two markets and provide your recommendation. (20 marks)

Question 3

One classmate tells you that Bloomberg machine has a table on exchange rate  forecast for  various currencies for  next  12  months by  the  currency analysts relying on International Fisher Effect. Do you believe that you can get rich quickly by following those predicted exchange rates? Critically evaluate your answer. (20 marks)

Question 4

After the Brexit in June 2016, your company is thinking about investing into a commercial property in UK because of the depreciation of the British Pounds. However, the CFO is afraid that the British pounds will continue to fall when the company sells the property in future. You should analyze various tools and select one of them to solve the currency fluctuation concern. (20 marks)

Question 5

What is a swaption? Describe the features of swaption and the swaption market. How swaption can be used to add value to a company? (20 marks)