For this assignment, students are asked to simulate the creation and operations of their own multinational corporation (MNC). Students will work in groups of five (5) and are required to justify the form of their own MNC, based in the Caribbean, which trades with a country outside of the Caribbean region (other than the USA). Students will then examine issues related to foreign exchange management within their multinational corporation. At the assigned date all groups are required to present their findings via Blackboard Collaborate.

This group assignment and presentation should address the following:

1. The form of MNC that the business takes, that is, franchising, licensing, and exportation

   of a product sold through a distributor, etc. The rationale behind using this form of MNC

   should also be given.

2. The main foreign currencies that will be used in the business.

3. The foreign exchange exposure of the company and how the company plans to manage

   this exposure.

4. Any current financial issues that affect the operating environment of the MNC and how

   these issues affect the companys foreign currency exposure.

As a part of your analysis of your foreign currency exposure, each group of students is asked to: 1.Determine and provide details of the forward rate of the currency that you are trading in. With

reference to the current interest rates, determine if interest rate parity exists between your home territory and your country of trade.

2.Based your assumptions indicate the expected future trend of the exchange rate between your home territory and your country of trade