Finance
Select two Canadian based MNCs that you want to include in your portfolio, make sure that your firms conduct
a substantial amount of international business. Review annual reports and news about each of your Canadian-
based MNCs to determine where it does most of its business and the foreign currency to which it is most
exposed. Be sure that there is significant exposure to at least one foreign country.
Next, select two foreign stocks that are traded on U.S. stock exchanges and are not from the same foreign
country. Many foreign stocks are traded on U.S. stock exchanges as American depository receipts (ADRs),
which are certificates that represent ownership of foreign stocks. ADRs are denominated in dollars, but
reflect the value of a foreign stock, so an increase in the value of the foreign currency can have a
favorable effect on the ADRs value in US dollars. You should convert to Canadian dollar to know the value in
Canadian dollar.
Name of Company Ticker Symbol
Foreign Stocks (ADRs)
Name of Company Ticker Symbol
Individual Assignment Requirements
a. Select one Canadian MNCs from your list and conduct research with appropriate reference to analyze its
operations in relation to the international financial context.
b. Determine the size of its exposure to the foreign markets and the major country where it does the most
business. Discuss the countrys membership and history with international financial institutions such as IMF,
World Bank, etc.).
c. Suggest ways to manage companys foreign exchange to minimize risk and optimize profitability (this may
include international bonds, international equities etc). Compare the financial products that can be
utilized and the most appropriate way to use them in the management of the company’s financial position.
d. Develop an appropriate and efficient risk management policy for the company by evaluating the different
risk management tools and instruments. Identify the hedging instruments that can be utilized and analyze each hedging alternatives.
e. Develop a hedging policy by making recommendation regarding how the companys management can best protect the company’s cash flow and financial position.
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