1. Gaborone Fried Chicken (GFC), is a Botswana based fast food restaurant chain headquartered in Gaborone and specializes in fried chicken. It is the Southern African region's second-largest restaurant chain as measured by sales. It has locations in Zimbabwe, South Africa, Lesotho, Swaziland and Namibia. GFC was founded by Ms. Foody who then roped in local and regional shareholders into the business.

Analyse country risks that GFC may encounter in the five countries other than Botswana.

(Note this will entail research into each of these countries).

(50 marks)

2. Briefly describe how various economic factors can affect the equilibrium exchange rate of the Japanese yen's value with respect to that of the dollar.

(20 marks)

3. A recent shift in the interest rate differential between the United States and Country A had a large effect on the value of Currency A. However, the same shift in the interest rate differential between the United States and Country B had no effect on the value of Currency Explain why the effects may vary. (10 marks)

4. Smart Banking Corp. can borrow $5 million at 6 percent annualized. It can use the proceeds to invest in Canadian dollars at 9 percent annualized over a 6-day period. The Canadian dollar is worth $.95 and is expected to be worth $.94 in 6 days. Based on this information, should Smart Banking Corp. borrow U.S. dollars and invest in Canadian dollars? What would be the gain or loss in U.S. dollars?