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FIN4802 EXAM PACK 2023

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Door: carolannbarnard2001 • 4 maanden geleden

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FIN4802
EXAM PACK




+27 81 278 3372

,UNIVERSITY EXAMINATIONS




January/February 2021

FIN4802

International Financial Management

Examiners
First: Prof K Tsaurai
Second: Prof G Marozva
External: Prof HP Wolmarans


Total marks: 100 Marks

Start date and time: 27 January 2021 at 13:15

End date and time: 28 January 2021 at 13:15

Duration: 24 Hours




This paper consists of 20 pages.


Instructions:

1. You can fill in your answers in the spaces provided in this question paper, print, scan and
upload it OR
2. You can work on your own papers, scan and upload them. This option applies to the students
who do not have access to printing facilities.


Please note:

1 Any silent, battery operated pocket calculator (e.g., HP10BII or Sharp EL733-A financial
calculator) may be used.
2 Pages for rough work have been provided (see pages 18 to 20). No rough work will be
marked.
3 Students must answer all the four questions.
4 Students must show all workings and calculations.

You must also include a declaration of honesty that the answers constitute your own work.

The Non-Venue Format is a Take-home Exam with submission on the eAssessment Info
Tool on myUnisa.

, CONFIDENTIAL FIN4802
Page 2 of 20 January/February 2021 (Non Venue Based)

Question 1 [25 marks]


Thiago (Netherlands) considers placing 40 percent of its excess funds in a one-year Canada dollar
deposit and the remaining 60 percent of its funds in a one-year Australia dollar deposit. The Canada
one-year interest rate is 15 percent, while the Australia one-year interest rate is 10 percent. The possible
percentage changes in the two currencies for the next year are forecasted as follows:


Currency Possible percentage change in the Probability of that change in
spot rate over the investment the spot rate occurring
horizon
Canada dollar -2% 20%
Canada dollar 1 60
Canada dollar 3 20
Australia dollar 1 50
Australia dollar 4 40
Australia dollar 6 10


Given this information, determine the possible effective yields of the portfolio and the probability
associated with each possible portfolio yield. If the one-year euro interest rate is 8 percent, what is the
probability that the portfolio’s effective yield will be lower than the yield achieved from investing in the
Australia? (Assume that the movements on the two currencies are not correlated). (25)



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, CONFIDENTIAL FIN4802
Page 3 of 20 January/February 2021 (Non Venue Based)


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