Academic Writing: Financial Relationship Management

Only for those who have strong background in Finance and Accounting with good command in English* Do not bid more than 80 USD and mention your qualification in your bid* 10 pages (3000 words) assignment. I would send the case studies, class readings and other material through email. However, here are some questions related to: Part A [2 questions, for a total of 5 marks] Note: Answer Part A in no more than one A4 type-written page, including any graphs, tables and calculations, and with at least 1.5 line spacing. Question 1 (3 marks; this question is related to Lecture 2) Read the following two articles from Lecture 2: “Southwest’s fuel [login to view URL]” and “US airlines rethink [login to view URL]”. Then, clearly explain, in more than 10 sentences, whether you agree or disagree with the following statement: “In some situations (e.g., in the airlines industry), hedging can be regarded as speculating.” Question 2 (2 marks; this question is related to Lecture 1) An insurance company must make payments to a customer of $1mil in one year and $5mil in three years. The current yield is constant at 6% p.a. compounded semi-annually. Required: If the insurance company wants to perfectly hedge its obligation to this customer with a single issue of a zero-coupon bond, what is the maturity of the zero-bond that it requires to issue? Clearly show your working/calculations. 4 Part B [20 marks] Background: Today is 8 September 2009. You have just taken over from Orange team as the portfolio manager of approximately a $1.1bn portfolio of debt issued to raise funds for various clients. The previous portfolio manager of the Orange team left the role suddenly and the following material has been made available to you for review, as you contemplate what needs to be done on 15 September when a range of transactions need to occur. a. Gamebook as in June 2009 b. Economic Overview: June Quarter 2009 and September Quarter 2009 c. Orange team performance report: Quarter ended September 2009 d. Client Transactions: 15/9/2009 e. Client Hedging requirements: 15/9/2009 f. Borrowing rates for new advances: 15/9/2009 g. Spreadsheet decision aid: 15/9/2009 Task: As the new portfolio manager, your immediate task is to formulate a strategy for 15