tailieunhanh - Lecture Multinational financial management - Topic 16: Foreign securities, risks, and expected returns

In this chapter, students understand and can recall the types of foreign security investments, costs and benefits of foreign investing; students can compute USD expected return of foreign investments, USD volatility of foreign investments. | Topic #16: Foreign securities, risks, and expected returns L. Gattis The Pennsylvania State University Finance 407: Multinational Financial Management 1 Poll (New problem Not in Packet) 2 Suppose you bought euros to buy a share of BMW on the German stock exchange. While holding the shares, the euro depreciated 5% and the euro price of BMW increased 10%. What do you estimate is the total USD return of this investment? 5% 10% 15% Learning Objectives 3 Learning Objectives Students understand and can recall the types of foreign security investments costs and benefits of foreign investing Students can compute USD expected return of foreign investments USD volatility of foreign investments Benefits and Risks of Foreign Investing 4 Benefits Diversification with current domestic portfolio Possible Higher returns (high growth markets) Risks Exchange Rate Changes Illiquidity Lack of Information/Transparency Reliance on foreign legal remedies Foreign Taxes Political and economic risk Security . | Topic #16: Foreign securities, risks, and expected returns L. Gattis The Pennsylvania State University Finance 407: Multinational Financial Management 1 Poll (New problem Not in Packet) 2 Suppose you bought euros to buy a share of BMW on the German stock exchange. While holding the shares, the euro depreciated 5% and the euro price of BMW increased 10%. What do you estimate is the total USD return of this investment? 5% 10% 15% Learning Objectives 3 Learning Objectives Students understand and can recall the types of foreign security investments costs and benefits of foreign investing Students can compute USD expected return of foreign investments USD volatility of foreign investments Benefits and Risks of Foreign Investing 4 Benefits Diversification with current domestic portfolio Possible Higher returns (high growth markets) Risks Exchange Rate Changes Illiquidity Lack of Information/Transparency Reliance on foreign legal remedies Foreign Taxes Political and economic risk Security Returns 5 Expected returns include both capital appreciation and dividends (or interest payments for bonds) In the equation above, the expected return for this security from period 0 to 1 includes the expected capital gain (P1-P0) and expected dividend (D1) paid at the end of the period. Security Returns 6 Suppose Sony stock is ¥5000 and is expected to be selling for ¥5500 in one year and also pays a dividend of ¥250. What is the expected yen return for a Japanese investor? Yen Return = {(5500-5000)+250}/5000=15% USD Return of Foreign Securities 7 Suppose Sony stock is ¥5000 and is expected to be selling for ¥5500 in one year and also pay a dividend of ¥250. The spot exchange rate is ¥100/$ and is expected to be ¥105 in one year. What is the expected USD return? A. B. C. D. USD Return of Foreign Securities 8 The spot exchange rate is ¥100/$ and is expected to be ¥105 in one year. What is the expected appreciation of the yen? A. B. C. D. -5% .

• Tài chính doanh nghiệp
• Financial management
• Multinational financial management
• Quản lý tài chính
• Quản lý tài chính đa quốc gia
• Multinational finance
• Foreign securities
• Financial statement
• International trade transactions
• Fundamentals of financial management
• Financial statement analysis
• International financial management
• Exchange rates
• Financial environments
• Overview of Financial Management and the Financial Environment
• The financial environment
• Forms of business organization
• Determinants of stock pricing
• Financial instruments
• Practical financial management
• Financial background
• Financial statements
• Financial planning
• Financial system
• Financial ratio
• IT financial management
• Setting the scene
• IT financial management maturity
• Parameters influencing IT financial management
• Costs of IT financial management
• More quantifiable benefits
• Overview of roles
• Hospitality financial management
• Hospitality industry management
• Analysis of financial reports
• Analyzing financial statements
• Management decision making
• Foundations of financial management
• Review of accounting
• Financial analysis
• Financial forecasting
• The financing decision
• Financial leverage
• Current asset management
• Paper F7
• Revision kit 2016
• Management Financial
• Financial Management Exam Review
• Review of Financial Management
• Study text 2016
• Lecture Multinational financial management
• International financial reporting standards
• Foreign exchange risk management
• Financing decisions
• Investment decisions
• Role of management
• International cash management
• Cash flow analysis
• Centralized cash management
• Intermediate financial management
• Financial options
• Corporate valuation
• Corporate governance
• Financial markets
• Cash flow
• Analysis of financial statements
• Ratio analysis
• Interest rates
• Financial institutions
• Forecasting sales
• Business environment
• Limited liability company
• Common size analysis
• Statement analysis
• Break even analysis
• Break even point