“Currency Exchange Rate”
From the e-Activity Part 1, based on your review of the currency exchange rates between the U.S. dollar and the various European currencies, evaluate in which country a financial institution should invest to maximize its return on investment for the minimum risk. Provide a rationale for your approach.
From the e-Activity Part 2, based on your research of the current EURO currency crisis, predict the future of the currency, including the impact to financial investment and risk within the EURO zone for financial institutions. Provide support for your prediction and evaluation.
“Hedging”
The futures market concept began centuries ago with hedging in the agricultural commodity prices. The markets have since expanded into a variety of future contracts, including hedging related to metals, foreign currency, and interest rates. Assess the risk involved in modern-day future contracts, suggesting a strategy for using this type of investment within financial institutions. Provide support for your assessment.
From the e-Activity Part 3, based on your research related to the regulatory requirements of futures contract risk exposure reporting, assess the adequacy of the reporting requirement. Indicate whether or not the public may be misled by management’s reporting of the financial risk related to these types of investments. Make a recommendation for improvement to the reporting requirements, indicating how this improvement will minimize risk for public users of the financial information.
E Activity
Go to Bloomberg’s Website and review the today’s exchange rate between the U.S. dollar and the various European currencies at http://www.bloomberg.com/markets/currencies/europe-africa-middle-east/. Be prepared to discuss.
•Search the Internet or Strayer databases for news related to the EURO currency crisis. Be prepared to discuss.
•Search the Internet or Strayer databases for information related to the regulatory requirements for the reporting of futures contracts risk within financial reporting. Be prepared to discuss.
