1. John is the CEO of EaglePLC, a multinational corporation, incorporated in the US butinvests in many emerging countries including Poland. Poland used to have a fixed exchange regime regarding its currency (Before the year 2000). However, Poland moved to adopt a free float exchange rate regime as from 14th of April 2000.
1.1. Discuss the motives of Poland's move, and its implications on the country's economy as well as the multinational companies such as Eagle PLC.
1.2. What strategy could Johnemploy in order to manage the exchange rate exposure resulting from the change in the currency regime?
Note that the essay should have attached the official cover sheet with the student number, course, module number and title. Please keep a copy of the essay for your own records. The essay should be submitted electronically via Study Direct.
Specific Guidelines
1- Your essay should not rely solely on the lecture notes and core textbooks. You are expected to use external resources and professional databases to learn more about the topic and provide an adequate analysis. All external sources must be referenced accordingly. Please avoid using shoddy reference such as the Wikipedia and so on.
2- Your essay MUST cover the following topics:
a. The different types of currency regimes.
b. The various types of foreign exchange risks and their implications.
c. State all possible methods and hedging techniques to manage the foreign exchange risk, and explain explicitly at least one of them.
3- A good essay should include real market examples, figures and tables to support your arguments (especially when talking about Poland's situation and the chosen hedging technique).
4- Your essay can have (but not explicitly) the following structure:
a. Brief Introduction (identifying the problem and clarifying what this essay is about)
b. Main body (the main analysis)
c. Brief conclusion of the main findings
General guidelines:
I. Your essay should clearly demonstrate analytical, critical and evaluative skills in relation to international financial management.
II. It is expected that your essay should demonstrate a wide background of reading and research; and only then, you would get an above average grade.
III. All references should be acknowledged (see Library handout on reference styles -Harvard approach is strongly recommended).
IV. Good standards of written English and presentation are expectedand marks will be deducted if such standards are not met.