Question 1: What is the theory of comparative advantage? Is the theory applicable in the current contexts? Why or why not? Question 2: Discuss and compare the different corporate governance regimes. Why should MNEs be concerned with such differences? Question 3: Classify the following as a transaction reported in a sub-component of the current account, orthe capital and financial accounts of the countries involved: An Australian firmpurchases a web hosting service from a US firm. Singaporean parents pay for their son’s study at an Australian university. A German company buys an insurance policy from a US insurer. AnIndian firm pays the salary of its executive working for a subsidiary in Australia. An Australian firm buys 100% shares of a Malaysian company. Question 4: Discuss what you understand by the term ‘impossible trinity’. Question 5: An Australian company is planning to import a new machine and is making a choice between two international suppliers. A supplier in Japan has quoted ¥2,500,000 as the price of the machineand¥100,000 as the shipment cost. A supplier in Germany has quoted €20,000as the price of a similar machine and €350 as the shipment cost. The following exchange rate informationare available: Exchange Rate between Australian Dollar and US Dollar: $0.77/A$ Exchange Rate between US Dollar and Japanese Yen: ¥107/$ Exchange Rate between Euro and US Dollar: $1.22/€ Which of these suppliers should the company choose? Assume that the choice is solely based on total Australian Dollar cash outlay required to cover the price of the machine and the shipping cost. Question 6: A German car now costs €50,000. The spot exchange rate is €0.67/A$. If the expected inflation rates in Australia and Germany are respectively 2.50% and 0%, what will be the Australian Dollarprice of that car 1 year from now: i. If there is 100% exchange rate pass through? ii. If there is 65% exchange rate pass through? [[Please note a very similar solution indicated in week 3/4 resources- please particularly note my comments with respect to that solution; for 65% pass through determination, assume A$ as the home currencyduring the percentage change of exchange rate calculation]] Question 7: John is a Forex trader. He focuses principally on the USDollar/Singapore Dollar ($/S$) cross-rate. The current spot rate is $0.76/S$ After considerable study, he concludes that the exchange rate, in the coming 180 days, will probably be about $0.95/S$. He has the following options on the Singapore Dollar to choose from: Option Strike Price Premium PUT on S$ $0.86/S$ $0.00014/S$ CALL on S$ $0.86/S$ $0.00017/S$ Discuss whether he should buy a PUT on S$ or CALL on S$, and what would be his net profit (in $)if the spot rate at the end of the 180 days is $0.92/S$. Question 8: Is purchasing power parity an accurate estimator of future exchange rates? Why or why not? Please explain. Question 9: On a particular date, the exchange rate between the Great Britain Pound (GBP) and the Australian Dollarand the exchange rate between the Australian Dollar and Euro were respectively £0.5221/A$ and A$1.60/€. On a later date, the exchange rates were respectively £0.5507/A$ and A$1.64/€. What were the percentage change in the values of the GBP and Euro against the Australian Dollar between these two dates? Were the changes devaluation or revaluation or appreciation or depreciation of these currencies? Assume that Australian Dollar is the home currency. Question 10: An Australian organization has a ¥40,000,000 account receivable from a Japanese customer in 3 months. The current Japanese yen (¥)/Australian Dollar (A$) spot exchange rate is ¥88.35/A$. The Australian organization expects that the spot rate in 3 months will be ¥95.45/A$. The 3-month forward exchange rate is ¥92.50/A$. The Australian Dollar (A$) 3-month borrowing rate is 8.00% per annum and the Australian Dollar (A$) 3-month investment rate is 5.00% per annum. The Japanese yen (¥) 3-month borrowing rate is 4.00% per annum and the Japanese yen (¥) 3-month investment rate is 2.00% per annum. The organization’s weighted average cost of capital is 10% per annum. The organization is considering three hedge positions: remaining unhedged, forward market hedge and money market hedge. Which of these hedge positions should the organization adopt? [Note: please use the appropriate examples to describe] This is an assessment to be addressed individually. This assessment item consists of a set of questions and problems, based on weeks 1 to 7 inclusive. You are to respond to the questions and upload your submission as a doc/docx/rtf format through respective submission link on Moodle. The assessment is to be typed, and you are to show any relevant formula and calculation steps. You can show your calculations through an Equation Editor, MathType or similar tools. Do not round until the final answer is reached and then show answers to two decimal places. If the answer is a percentage, convert from decimal format to percentage with two decimal places. For discussion questions, you are to use the library and online resources further to the prescribed textbook. The referencing style needs to be consistent, and you are to adopt proper academic writing process. Questions: The questions you need to answer are available here. Some aspects to note You may use Microsoft Excel or similar software for the numerical assessment questions. However, the answer should preferably be provided in a Microsoft Word compatible document format. If you submit calculations in a Microsoft Excel document, the file should contain clear explanations of the steps and any relevant formula used. The explanations in discussion questions should consider the marks allocated. It is the quality of the answer, rather than a specific length, that will be judged. If you need an extension to complete the assessment, please let the unit coordinator know as soon as possible and preferably by two days prior to the due date. Please also submit relevant proper documentation to support such extension request. The decision on an extension request will be made on a case by case basis. Notably, submissions granted extension may be returned later than the advised return date. If the submission is late and no extension has been requested or granted, a penalty may be applied following the university policy (i.e., 5% of total assessment marks per each day the submission is delayed). The relevant policy is listed here. Maintaining academic integrity is of utmost importance. The TurnItIn report (rather than just the TurnItIn score) will generally be checked during the grading. If you use sources (including the book) to support your discussions, you must use in-text referencing to properly acknowledge the work of the original author further to listing the sources properly in the bibliography at the end of the document. However, you are not expected to reference the formulae. Please make yourself familiar with the APA (the recommended) citation format from here.