Provide a 2 pages analysis while answering the following question: Finance SLP 2. Prepare this assignment according to the guidelines found in the APA Style Guide. An abstract is required.
1. What is the value of your $10,000 of your country’s currency now? The best and fastest way for a person to determine the current value of any monetary unit in terms of another monetary unit is to locate a currency converter online. Xe.com is a website that is easy to use which provides currency conversions in real time. The current value of $10,000 in terms of Japanese Yen is 1,068,794.22 JPY.
2. Collect the following information:
A) The daily currency values for the last week
B) The currency values for the last week of last year
C) The daily currency values for the last week two years ago.
The currency values of USD to JPY were obtain in Oanda.com7/12/2008 – 106.79607/13/2008 – 106.32607/14/2008 – 106.32107/15/2008 – 106.45907/16/2008 – 105.41507/17/2008 – 104.52607/18/2008 – 105.44207/12/2007 – 121.72407/13/2007 – 122.32107/14/2007 – 122.33507/15/2007 – 121.98707/16/2007 – 121.98607/17/2007 – 121.89707/18/2007 – 122.03707/12/2006 – 114.24207/13/2006 – 114.79807/14/2006 – 115.33807/15/2006 – 115.8707/16/2006 – 116.16207/17/2006 – 116.16207/18/2006 – 116.70203.
Give your opinion about whether or not a company doing business in your country should hedge their currency or not? The company I’m investigating is located in Japan. The Yen last year was very strong against the dollar. It gain purchasing power last year in reference with two years ago. Now things have changed, the Yen has considerably gone down in comparison with the dollar. Another alarming factor is the intra-day fluctuations in the value of the Yen.
In a seven day period during the last week the difference between the high point value and low point value was 2.24 Yen or about 2.1%. This is not a good sign and the company doing business in Japan should play a hedging game to ensure stability of its sales value. ReferenceOanda.com (2008). Historical currency exchange rate. Retrieved July 18, 2008 fromhttp://www.oanda.com/convert/fxhistory Xe.com (2008). Universal Currency Converter. Retrieved July 18, 2008 from http://www.xe.com/ucc/convert.