FIN4802 ASSIGNMENT 1 2025 – STEP-BY-STEP CALCULATIONS PROVIDED (DUE 21 MAY 2025)

Description

FIN4802 Assignment 1 Memo | Due 21 May 2025. Step by Step Calculations Provided.

Question 1 (8 Marks)

Mkhize Ltd would like to assess the country risk of South Africa. Mkhize Ltd has identified various political and financial risk factors, as shown below. Political Risk Factor Assigned Rating Assigned Weight Blockage of fund transfers 7 65% Bureaucracy 3 55% Financial Risk Factor Assigned Rating Assigned Weight Interest rate 5 30% Inflation 6 20% Exchange rate 5 11% Competition 4 35% Growth 7 30% Mkhize Ltd has assigned an overall rating of 85 percent to political risk factors and of 35 percent to financial risk factors. The investment policy for Mkhize Ltd mentions that the company can only invest in a country if the country’s risk is below 8.5. Should Mkhize Ltd consider South Africa for investment? [8]

Question 2 (15 marks)
Tshepo Molefe is a foreign exchange dealer with Investec South Africa. He notices the following quotes:

Spot exchange rate ZAR1.3220/BWP All questions fully answered.