Estimate the following for the exchange rates which you have used for Part 3.You are...

Question

Estimate the following for the exchange rates which you have used for Part 3.You are required to use the statistics you calculated using the given exchange rates in the assignment to assess the currency risk faced by VCL and suggest possible strategies to overcome those.(provides a summary of estimated statistics in the assignment and submit an EXCEL worksheet with all detailed calculations. ).

The weekly exchange rate changes (percentage changes)- (do in the worksheet)

Averages and standard deviations for weekly exchange rate changes for each six-month period (starting with 30/06/2018)-(present with the assignment with your interpretation)

Averages and standard deviations for weekly exchange rate changes for each 12-month period (starting with 30/06/2018) -(present with the assignment with your interpretation)

Correlation of weekly foreign exchange rate changes among four currencies in each 6-month and 12-month period - (present with the assignment with your interpretation)

Using the VaR in 95% probability, evaluate currency risk faced by the VCL over time (use the estimated average exchange rate changes and standard deviations for your calculation). Use the estimated VaR to illustrate the foreign exchange risk faced by the company in each currency. - (present with the assignment with your interpretation)

Critically evaluate movements of estimated average and standard deviation values and the correlation coefficients over time. How such movements are important in managing foreign exchange risk. You need to link your discussions with the part 1 and 4 of task three of this assignment. Here, you are required to elaborate on how the VCL operational results could have been affected by the recorded exchange rate changes.

Identify possible internal and external foreign exchange risk management (hedging) strategies that VCL can use to mitigate the FX risk exposure they faced. You need to briefly explain the possible advantages and disadvantages of each strategy you have identified

vhvh-c4exmpsp.docx fx-rates-for-assignment-2021s2b11-1-wnbrxsuh-vm10rv5l.xlsx part-3-h2xbsgou-ixavcxav.docx vhvh-04ihrx4o-3owrmn0k.docx

Mohd · Accepted Answer

L
For the period of two year from start averages for USD and JPY currency rates are negative. 
For the period of one and half year from start averages for INR and THB currency rates are negative.
In the period of july 2020 to December 2020, the average exchange rates for all currencies are maximum throughout the three year period.
For the period of one and half year from start standard deviation for all countries currency rates are approximately constant over the period of time.
In the period of jan 2020 to june 2020, the standard deviation of change in  exchange rates for all currencies is maximum throughout the three year period.
	Period
	Averages
	Standard Deviation
	From
	to 
	 USD 
	 INR 
	 THB 
	 JPY 
	 USD 
	 INR 
	 THB 
	 JPY 
	30-6-2018
	31-12-2018
	-0.14%
	-0.10%
	-0.25%
	-0.21%
	0.0111
	0.0127
	0.0137
	0.0153
	1/1/2019
	30-6-2019
	-0.06%
	-0.06%
	-0.21%
	-0.07%
	0.0086
	0.0107
	0.0159
	0.0115
	1/7/2019
	30-12-2019
	-0.01%
	0.12%
	-0.08%
	-0.03%
	0.0085
	0.0109
	0.0161
	0.0115
	31-12-2019
	30-6-2020
	0.00%
	0.19%
	0.15%
	0.01%
	0.0278
	0.0298
	0.0256
	0.0270
	1/7/2020
	30-12-2020
	0.42%
	0.32%
	0.29%
	0.25%
	0.0124
	0.0115
	0.0135
	0.0125
	31-12-2020
	30-6-2021
	-0.09%
	-0.02%
	0.15%
	0.18%
	0.0121
	0.0110
	0.0119
	0.0108
	Period
	Averages
	Standard Deviation
	From
	to 
	 USD 
	 INR 
	 THB 
	 JPY 
	 USD 
	 INR 
	 THB 
	 JPY 
	30-6-2018
	30-6-2019
	-0.10%
	-0.08%
	-0.23%
	-0.14%
	0.0100
	0.0118
	0.0148
	0.0136
	1/7/2019
	30-6-2020
	0.00%
	0.15%
	0.03%
	-0.01%
	0.

Estimate the following for the exchange rates which you have used for Part 3. You are required to use the statistics you calculated using the given exchange rates in the assignment to assess the...

Answer To: Estimate the following for the exchange rates which you have used for Part 3. You are required to...

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment