An Analysis Of An International Portfolio Investment For Board Of Directors

1730 Words Oct 10th, 2014 7 Pages
3003IBA, Project – 2014: An analysis of an international portfolio investment for board of directors.

Jesus David Castano Cuadro
Student ID: S2916020
Word Count: 1526

Griffith Business School
Nathan Campus.
October 2014

Table of contents

1. Predicting the expected spot exchange rate 1
1.1 Australian Dollar 1
1.2 Chinese Renminbi 2

2. Australia VS. China 4
2.1 Financial sector 4
2.2 Consistent economic growth 5
2.3 A politically stable government 6
2.4 Location 6
2.5 Indicators 6

3. FDI VS. FPI 7

References 9

1. Predicting the expected spot exchange rate

It is known that exchange rates float according to market conditions and that the appreciation or depreciation of a currency that we trade with my have an impact on the eventual revenue obtained so it is important for us to predict what the movements with the currency will look like.
After analysing data collected from experts in the field and using two different forecasting methods we have come to the following conclusions regarding the expected exchange rate between USD and AUD for 06/01/2015 (1 of June, 2015):

- Current US inflation rate = 1.70%
- Future US interest rate (expected for 06/01/2015) = 2.2%
- Current US interest rate = 0.25%
- Future US interest rate (expected for 06/01/2015) = 0.25%

1.1 Australian Dollar

- Current inflation rate = 3.00%
- Future inflation rate (expected for 06/01/2015) =…
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