Answer the following questions:

1) Provide examples of how real world multinational corporations (MNC) reduce their translation, transaction and economic exposures.

2) Explain the difference between foreign direct investment (FDI) and portfolio investment (PI).

Collect the required the data from the Bureau of Economic Analysis (BEA) website and answer the following questions:

3) List the ten largest countries by value of investment that invested in Australian in the years 2011 and 2014. You need to provide the list of countries as well as the amount of FDI invested in AUD.

4) What factors do you think account for these countries investing large amounts of FDI in Australia?

5) Have the list of investing countries changed over the concerned period? What might account for these changes?

6) Do you expect a change to the 2013 list over the next 5 years? Explain.

This assignment is intended to test your knowledge of theories of exchange rates, parity conditions in international financial markets, the balance of payments and derivative markets. The assignment consists of four separate parts.

The assignment is expected to be of standard quality with respect to spelling, grammar, punctuation, etc. Assignment submitted must be written in your own words and it must be your own work. It should not exceed 1500 words. Severe penalties apply for assignments, which exceed the word limit. The word count excludes references, tables and figures. If the assignment exceeds the word limit, then the following mark deductions will be applied. Please note that the word limits are strictly enforced.