International Finance Assessment

International Finance Assessment

Answer both parts of this assessment

Part 1 (50 marks)

You work in the research department of a major global commercial bank. The bank’s foreign exchange dealers have told you that they have some of the world’s smartest investors among their client lists. You have been asked to write a report that proposes a strategy through which your bank might benefit from monitoring and responding to the actions of these customers.

In writing this report:

1. Explain and justify your strategy with use of appropriate academic and/or professional research

2. Explain in as much detail as possible any statistical analysis that would need to be performed (if any) and detail any data that you would need to collect to make your strategy operational

3. The bank’s brand and reputation are highly valued by senior management. Discuss the possible implications of your strategy on the bank’s reputation and how this might be managed.

Part 2 (50 marks)

You are the Assistant to the Chief Investment Officer (CIO) of a large asset management firm with a broad range of retail and institutional clients. Your firm currently only offers products that invest in equities but the CIO is reviewing the case for offering products that view foreign exchange rates as an asset class. You have been asked, as part of this review, to write a paper discussing the extent to which the company can expect to be able to offer attractive investment products using major market exchange rates.

You can take any approach you like but your paper must be based on one or more topics from the course. You may, for example, choose to focus on the performance of specific classes of trading rules. Alternatively, you might survey the broader approach of using macroeconomic approaches to forecasting exchange rates. Or you can choose any other approach that you think might be of value. Simply define and justify the extent of your review at the start of the report. You should make a clear and well-justified recommendation.