Do yuan to buy some renminbi?

 

Read the case study: Do yuan to buy some renminbi? And answer all the questions.

Go beyond the information in case study; analyze and project. Use APA references.

Questions:

1. Based on your readings, research, and case study, answer, in no less than one page, the following questions:

a. Why is it important for the Chinese yuan to become a major world currency?

b. What needs to take place for the yuan to be listed right along the U.S. dollar and the euro as global currencies?

c. Why is the Chinese government so hesitant to open up the yuan to market forces to determine its value inside and outside China?

Go beyond the information in case study; analyze and project!

Source:

Daniels, J., Radebaugh, L., & Sullivan, D. (2013). International businessEnvironments & operations(14th ed.). Upper Saddle River, NJ: Pearson 

2. Second assignment-

A company’s competitive actions should flow from its strategic orientation, and its leadership must build the foundation for a competitive strategy that leads to superior performance. A competitively aggressive company will vigilantly and forcefully defend its market position, while trying to undercut its rivals’ positions (Stambaugh, Yu, & Dubinsky, 2011).

To establish its desired competitive position, the company has to accurately assess its industry and understand the fundamental factors that impact its long-term profitability prospects (Hax & Majluf, 1996). The company should also define its competitive advantage, and how it intends to do business better and differently from the competition. The trade-offs that the company will make, are what will strategically distinguish it from the competition (Collis & Rukstad, 2008).

Based on your readings this week, what are those trade-offs, and how do they impact the company?

Sources:

Collis, J. D. & Ruckstad, M. G. (2008). Can you say what your strategy is? Harvard Business Review, 86(4), 82-90. Retrieved from www.hbr.org/

Hax, A.C. & Majluf, N.S. (1996). The strategy concept and process (2nd ed.). Upper Saddle River, NJ: Prentice Hall.

Stambaugh, J. E., Yu, A. & Dubinsky, A. J. (2011). Before the attack: A typology of strategies for competitive aggressiveness. Journal of Management Policy and Practice, 12(1), 49 – 63. Retrieved from http://www.na-businesspress.com/jmppopen.html

Part 3-

Translation Exposure:

Translation exposure occurs as MNCs translate their subsidiaries financial data to their home currencies in order to consolidate their financial statements. This type of exposure does not affect the MNCs cash flow, and hence may be regarded as unnecessary to hedge or reduce. However, some MNCs are concerned about their translation exposure due to its impact on their reported earnings, and hence on their valuation and stock prices.

MNCs may minimize their translation exposure by matching their foreign liabilities with their foreign assets e.g. by using foreign financing to match their level of foreign assets. Other companies may use forward contracts or future contracts to hedge their translation exposure. Hedging translation exposure may be limited by inaccurate earnings forecasts, inadequate forward contracts for some currencies, accounting distortions, or increased transaction exposure.

Translation exposure is reduced by selling forward the foreign currency remitted by a subsidiary. If the foreign currency depreciates against the MNC’s home currency, the negative impact on the consolidated income statement will be offset by the gain from the forward sale in that currency. However, if the foreign currency appreciates, this will result in a loss on the forward sale, which will be offset by the favorable effect on the reported consolidated income statement. However, some MNCs are not satisfied with this type of paper gain that offsets a cash loss. In addition, if the subsidiary decides to invest the gains locally, the parent company will not receive any of those gains to account for i.e. the parent company’s net cash flow will net be affected. On the other hand, the loss resulting from hedging is a real loss that will reduce the net cash flow to the parent company. In such a case, the MNC will be reducing its translation exposure at the expense of increasing its transaction exposure.

Some companies prefer not to hedge their translation exposure as they consider it irrelevant. Such companies prefer to clarify on their consolidated statements how their earnings have been affected by exchange rate movements. Knowledgeable investors will understand that the lower earning were due to exchange rate effects, rather than due to poor performance.

Madura, J. (2003). International Financial Management (7thed.). Mason, Ohio: South-Western (Thompson Learning).

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more