apa format with proper citations and at least 4 reference
if use direct quotes add quotation marks (Jones, 2015, Section 23)
paper to be at least 1 to 2 pages not counting title and references page. There must be a introduction and conclusion and use proper heading in paper
Axetem’s training program includes
various training rotations in which executive trainees spend some time in
various departments to receive training that is more specific and gain
additional international market experience.
This week, you have been assigned to
Axetem’s trading department to gain additional knowledge about various
financing and investment tools in international trade. One of the
characteristics of international markets is that stocks and bonds cannot simply
be traded, but a convenient way to invest is through using American Depository
Receipts (ADRs). Axetem’s trading department invests some of the company’s
excess cash in ADRs and foreign-denominated debt securities.
As part of your training, you are
presented with the following 2 assignments:
- Describe the advantages of investing using
American Depository Receipts (ADRs).
- Help Mike Jones, one of Axetem’s investment managers,
with the following calculations:
In the London market, EEC Inc.’s
stock closed at £0.875 per share on Thursday, April 1, 2005. EEC trades in
ADRs in the over-the-counter market in the United States. Four underlying
EEC shares are packaged into one ADR. On April 10, 2005, the spot exchange rate
for the British pound sterling to the U.S. dollar was £0.7366 to $1.00.
Determine the no-arbitrage U.S. price of 1 ADR.
Mike Jones is also interested in a
10-year floating-rate note (FRN) with coupons referenced to a 6-month London
Interbank Offered Rate (LIBOR). The note pays interest on a semiannual basis.
Assume that the current 6-month LIBOR is 3%. If the risk premium above LIBOR
that the issuer must pay is 1/4 percent, calculate the next period’s coupon
rate on a £1,000 face-value FRN.
Explain calculations also in details