Project #96105 - finance

I need the following questions answered from the case in pg. 217 - 225 of the attachment.

 

Case: Foreign Exchange Hedging Strategies at General Motors: Competetive Exposures Questions: 1. On page 3 of the case, Feldstein lays out a compelling case to measure the competitive exposure GM faces vis-à-vis the yen. Using the information in the case and a 20% yen devaluation, fill in each step (i.e., steps on page 3 of case) to determine GM’s competitive exposure. 2. Suppose that you do not have detailed information or data on GM or its foreign competitors. Instead, you run a regression of GM’s stock returns on exchange rate changes and the market risk premium (return on market minus the Treasury rate). From this regression, you obtain a GM yen/dollar exchange rate exposure coefficient of -0.33, indicating that GM’s value declines as the yen depreciates relative to the dollar. Suppose the yen depreciates by 20% and GM’s market value was about $23 billion in 2001. Use the exposure coefficient to determine GM’s competitive exposure and compare this result with your results in the previous question (#1 above). 

Subject Business
Due By (Pacific Time) 11/26/2015 01:00 pm
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