FINA412-1201B-01 : Risk Management Assignment Type: Individual Project Deliverable Length: 1,000 words You are a financial analyst for the Trademenow Corporation. The president has requested that you explain the key drivers that are affecting exchange rates and the foreign exchange market. Do the following: Define each driver: trade, news, and currency substitution. Define volatility as it pertains to each driver: trade, news, and currency substitution. For each of the following scenarios, explain how each driver affects exchange rates: Scenario 1: Gold in the United States is a hot commodity. The exchange rates between Africa and the United States regarding gold trade have become more volatile. Explain what affect trade will have on the exchange rate. Scenario 2: As you are preparing your notes for tomorrow’s presentation, you catch a news report that Libya has struck oil, making them the second largest oil reserve in the world. Explain what affect this news could have on the exchange rate. Scenario 3: A retail store in Iceland wants to use U.S. dollars to purchase the latest fashionable jeans from the United States at a bargain price. Explain the affect that currency substitution will have on this purchase. The following grading criteria will apply to this assignment: Grading Criteria30%Define each listed key driver (trade, news, and currency substitution)15%Define volatility as it pertains to each listed key driver 40%Review the three scenarios above. Explain what affects each of the above key drivers will have on the exchange rates and purchase as indicated in each scenario.15%Be sure to use proper APA format, references list, and proper in-text
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