International Finance and Financial Markets - Assessment Brief and Learning Outcomes

Learning outcomes to be assessed

1. Demonstrate a good understanding of International Finance and International Financial Markets
2. Evaluate the available sources of finance and financial products that are available to business
3. Identify the appropriateness of a financial strategy for a business organisation

4. Interpret information quickly, distill complex messages clearly and concisely to relay them to a variety of different groups

Assessment brief including criteria mapped to learning outcomes

Assessment 1 - In-class presentation of the case study 

Students will present analysis of their selected case study (see assessment brief below). Presentation will be assessed based on following criteria (equally weighted): 
•Clarity of verbal expression. 
• Validity of reasoning used to support strategic decisions. 
• Quality and level of evidence presented to support your view. 

Learning outcomes tested:
1. Identify the appropriateness of a financial strategy for a business organisation
2. Interpret information quickly, distill complex messages clearly and concisely to relay them to a variety of different groups

Assessment 2 - Case Study Analysis 

Students will need to analyse selected case study (see assessment brief below) in a submission of about 2,000 words 

Learning outcomes tested:
1. Evaluate the available sources of finance and financial products that are available to business
2. Identify the appropriateness of a financial strategy for a business organisation
3. Interpret information quickly, distill complex messages clearly and concisely to relay them to a variety of different groups

Assessment brief:

Question 1 – 30 marks

You are a Polish manufacturer of leather goods and have currently signed a contract with a UK retailer. The contract is in GBP for £500,000 payable in one months’ time. Whilst there is no credit risk arising from contracting with the UK retailer there is still the exchange rate risk and that is why you must decide whether or not to hedge against currency movements.

In one months’ time the Polish exporter must pay its suppliers and employees in Euros.

How would you protect your business against an adverse currency movement using forward exchange contract?  Calculate what the one month forward rate should be given that the current one month Eurobank interest rate is 2.5% and the one month Gilt rate is 1.2%.

In your answer please:
1. Define a forward exchange contract (no more than 200 words, based on financial literature) - 5 marks
2. Explain why would you like to use this protection (no more than 300 words) - 10 marks
3. Clearly show your calculations and flow of transaction - 15 marks

Question 2 – 70 marks

Your uncle, an experienced engineer, is considering starting a new venture manufacturing blades for fans produced by larger firms. Your uncle has a clear technological advantage over competitors as he came up with a revolutionary galvanizing process for blades which offers huge cost savings, although it is not patented yet. He has also an extensive managerial/operational experience. What he lacks is the necessary funding to finance the new venture – and he hopes that you, as a UWL accounting & finance student, will be able to help him in his venture.

For a start, he asked you to write him a memorandum about start-up financing – how a small company is usually financed. He is particularly interested whether he will be able to borrow money from the bank from the very day of establishing his company. He also wants to learn if there are any differences between accessibility of finance for start-ups and for small companies which already have some business history.

Please prepare a memorandum to answer your uncle’s questions. In particular, in very clearly separated sections, please:

1. Identify the sources of finance in different growth stages of the company,

2. Describe banks’ preferences while lending to companies in general,

3. Assess the role which venture capital might play in his venture and in what stage it might become a realistic financing option and

4. Advice your uncle on steps he should take to make his venture successful.