1. Ethical Standards
a. Can a multinational firm adopt varying ethical standards [such as with regard to product safety (Pinto), employee benefits (Nike) and "kickbacks" to win business (HP)] in its global operations? Why or Why Not? Discuss in depth based on the goals of multinational corporations?
b. How do corporate governance and financial management differ for US based corporations and global multinational corporations?
2. Global Pricing Strategy
With the emergence of the Internet as a dominant influence in global markets, many anticipated that the "Law of One Price" for all products would evolve.
However that did not materialize.
- What is "Law of One Price"?. When would that exist globally?
- Identify the major pricing strategies/ methodologies of corporations in pricing products and services.
- How is "internet pricing" different from 'brick and mortar' pricing? Discuss the impact of the Internet on "Global Pricing Strategies" of firms.
3. Triangular Arbitrage Strategy:
A. Is the foreign exchange market inefficient? Discuss.
B. Problem:
The following Quotations are available to you. (You may either buy or sell at the stated rates)
Singapore Bank: Singapore dollar quote for Korean Won Won 714.00/S$
Hong Kong Bank: HK$ quote for Singapore dollars HK$ 4.70/S$
Korean Bank: Korean won quote for Hong Kong dollars Won 150.00/HK$
Assume you have an initial HK$1,000,000. Is triangular Arbitrage possible? If so, explain the Steps, and compute your profit?
- What are the implications of trading spreads and commission costs for this profit?
Financial Institutions Muti-goal Optimization Strategy:
a. Identify the major 'objectives' and 'problems' in the management of financial institutions globally. What strategies do institutions use to meet these challenges?
b. How do regulators evaluate the financial institutions?
c. Why did 'Virtual Banks' fail? Discuss in depth. Based on this, What are the prospects for Mobile Banking worldwide in the forthcoming decade?
d. How do Central Banks promote Monetary Stability? Explain with reference to the recent 'sub-prime' crisis.
5. Theoretical Relationship 1: Relationship between Money Supply and Inflation; Monetary Equation
- What Causes Inflation? Discuss.
- What is the 'Monetary Equation'. Why is it important to the financial manager?
- What are the implications of this for the 'foreign exchange market'?
- Trade Policy and Offshoring Strategy:
a. Why do nations trade with one another? Explain in your own words.
b. What is Dynamic Comparative Advantage? What are the implications of this for the current debate on "Outsourcing" and "Off-shoring?"
c. What strategies should corporations adopt to minimize the impact of off-shoring on its employees?
6. Theoretical Relationship 2 : Relationship between Inflation and Interest Rates; Domestic Fisher Effect
What is the 'Domestic Fisher Effect'?
What is the relationship between Inflation and interest rates ?
Why is it important for the Global Financial manager?
7. Theoretical Relationship # 3: Relationship between Inflation and Exchange Rates; Purchasing Power Parity
Explain the concept of 'purchasing power parity' (PPP) in your own words.
What are the requisite conditions for PPP to exist?
What is the relationship between PPP and exchange rates ?
8. Theoretical Relationship # 4: Relationship between Interest Rates and Exchange Rates; Interest Rate Parity
Illustrate the concept of 'Interst Rate Parity' and 'Covered Interest Arbitrage' with a numerial example. What are the implications of this for Foreign Exchange Market.?
9. Auctions Market Strategy:
Are auctions the optimal method to sell a security or service?
Explain the advantages, and disadvantages of the Auction method of Selling for the buyer and seller, using a specific example..
Explain why corporations do not sell "all" their products by auctions?
What are the reasons for the success of Internet auction companies such as e-bay and Priceline?.
10. Global Financial Crisis:
Briefly Explain these crisis in your own words, what these are about, what caused it, how it was resolved and what are the lessons learnt from it.
- Debt Crisis: Russia, Iceland
- Foreign Exchange Crisis: Mexico, Asian Crisis
- Banking Crisis: Japan, USA Subprime