Finance

The Final Paper and Sample Paper
Posted on: Thursday, April 30, 2020 5:50:58 PM EDT

Dear all,
As the syllabus shown on Blackboard, the final paper has two options. (please read the syllabus in detail)
Option 1: Choose a US firm and a country where the firm is not currently present. Develop an in-house proposal, suggesting whether and how your firm should enter the market. Be sure to include: ‐ Financial analysis of investment decision (NPV of cash flows) ‐ Foreign exchange risk analysis and risk mitigation recommendation ‐ Possible financing alternatives ‐ Tax optimization views ; Option 2: Review “The Big Shorts” and “Defaults”, based on the given questions on Blackboard. “The Big Shorts” is a movie about the 2007-08 Global Financial Crisis; “Defaults” is movie about the 1997 Asian Financial Crisis.
Final paper will be prepared in groups of 2 to 4 students. It is expected to be typed and in format appropriate for a corporate communication. Executive summary should be no longer than 5 pages, with unlimited exhibits and attachments.
I have uploaded one sample paper for the option 1 in the Assignments folder on Blackboard.

Option 2,

“The Big Short” is a movie about the 2007-08 Global Financial Crisis; “Default” is a movie about the 1997 Asian Financial Crisis.
1. Could you describe and explain how Michael Burry using the credit default swap in “The Big Short” film to profit from the collapsing house market? Credit default swap is a derivative, for which we have studied FRA this semester. What is the underlying asset of credit default swap in “The Big Short” film? Why Michael Burry and the others sell the credit default swap to close their position before the maturity date? Why they don’t wait until maturity to receive a payoff if they are sure most mortgage contracts will be default triggered by the housing bubble?
2. Could you describe how Jung-hak takes advantage of the crisis and bets against the Korean economy in “Default”? Could you relate the case we discussed in class about the Peso crisis to explain what the cause results in Korea’s sovereign default is? Is Korean Won pegging to USD? Why Korean Won got weaken before the crisis? How the government ran out of foreign reserve? Do you support International Monetary Fund (IMF)’s action in “Default”? IMF imposes the policy overhauls to Korean after they accept bailout terms, and the policy overhauls weaken the employment laws and impose austerity measures.
Please organize your answers to these questions into a 5-8 pages article, and also compare the similarities and differences between these two movies.