Case Study

M&A Plc. is a large car manufacturer headquartered in the United Kingdom. M&A is looking to expand its operations in China and as such has taken out a £15 million floating rate loan, but is worried that, with Brexit, prevailing interest rates in the UK could rise, leading to an increase in the cost of the loan. M&A has contacted your consulting company to obtain advice on how best to hedge this risk and has asked
you to produce a report on this.

Required : 7FNCE019W International Risk Management Assignment 

•  You are required to write a 2,500 word (10%) report advising M&A Plc. of the type of risk that they face, what the recent academic literature has to say about managing this risk and how they could use the different available financial products to hedge against this risk.

• This report is done on an individual basis and you are expected to show some form of evidence that you have used the Financial Markets Suite (FMS) when preparing your report.

• The report is to be correctly referenced using the Westminster Harvard style of referencing and a bibliography is also to be provided.

• The report is to be typed in Microsoft Word, using Arial 12pt font and 11⁄2 line spacing, and all tables and figures should be correctly labelled and sourced.

• The report should be submitted online via Turnitin using the link provided on themodule Blackboard site.

Structure of the Report

The report should follow the following structure, i.e. the report should have:

1. A COVER PAGE, which should contain:

a) The module title and code.

b) An appropriate title for the report.

c) Your student number.

2. A TABLE OF CONTENTS, which should contain:

a) A full list of all sections (including a list of references, a list of bibliographic materials, and any appendices to the report).

b) The page number on which each section begins.

3. An EXECUTIVE SUMMARY, which should:

a) Highlight the aim and key findings of the report.

b) Be in the third person and present tense, e.g. “This report compares…”

4. An INTRODUCTION section, which should:

a) Give a succinct explanation of the aim, scope and context of the report.

b) Give an overview of what is meant by interest rate risk and M&A could
measure their exposure to this type of risk.

5. A LITERATURE REVIEW section, which should:

a) Give an overview of what the academic literature has to say on the topic of hedging interest rate risk.

b) Provide a critical review of at least 5 relevant academic articles.

6. An APPLICATION section, which should contain:

a) A demonstration of how the different financial products that you could use to hedge this interest rate risk would work in practice.

b) A critical analysis of the different financial products M&A could use to hedge their interest rate risk.

c) Evidence that you have used the Financial Markets Suite (FMS) when
preparing the report.

7. A CONCLUSION section, which should:

a) Should briefly summarise the aim and key findings of the report.

b) Should make a recommendation to M&A’s managers on how best to manage their exposure to interest rate risk.

8. A LIST OF REFERENCES and BIBILOGRAPHY, where:

a) The list of reference would list the details of any material cited in the report (full details of the source should be given using the Westminster Harvard referencing system).

b) The bibliography would list the details of any other sources referred to when preparing the report but not actually cited in the report itself (full details of the source should be given using the Westminster Harvard referencing system).

Assessment Criteria

The Individual Coursework will be assessed based on the following criteria:

Submitting Your Coursework – Checks

You must include your name, student ID and word count on the first page of your assignment.

Unless indicated otherwise, coursework is submitted via Blackboard. On the Blackboard home page for the module you will find a button on the menu called ‘Submit Coursework’. Clicking this will take you to the submission link.

At busy times the coursework submission process may run slowly. To
ensure that your submission is not recorded as a late submission, avoid
submitting very close to the deadline.

To submit your assignment:

1. Log on to Blackboard at http://learning.westminster.ac.uk;

2. Go to the Blackboard site for this module;

3. Click on the ‘Submit Coursework’ link in the navigation menu on the left-hand side

4. Click on the link for the assignment;

5. Follow the instructions.

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