ECO802: IG Virtual Trading - Global Stocks or Global Bonds - Accounting and Finance Assignment Help

Assignment Task:

Each student will complete this assignment by doing a global remittance experiment at IG from week 2 to week 10. This individual assignment starts from week 2 until end
of week 10. Suppose you are currently working in Australia and you have accumulated AUD $ 40,000 from your work. You can start to create an IG virtual trading account at the beginning of week 2 and use all AUD $ 40,000 virtual trading money to invest with foreign exchange or stocks and bonds. Your ultimate goal is to send your money back to your home country at the end of week10. Right now you have a couple of options:

1: In this IG virtual trading account, you can use AUD $ 40,000 to buy another currency that you predict willappreciate in value against AUD in the future. Please research the long term (10 year) historical exchange rate pattern of this foreign currency to AUD. Please also conduct a scenario analysis assuming a financial crisis hits in the future, whether this foreign currency will appreciate against AUD in the future. Please use the historical evidence in scenarios of financial crises to justify your choice. You are required to document the performance of foreign exchange transaction from week 2 to week 10. Also document how much you will have in your country currency at the end of week 10 by closing out your foreign exchange transaction and converting from AUD to your home country currency at the spot exchange rate at the end of week 10.

2, In this IG virtual trading account, you can use AUD $40,000 invest in Global stocks or Global bonds. If you choose to invest in Global stocks and bonds, if you invest outside Australia markets and please indicate whether you will engage in currency futures, currency swaps or currency forwards to hedge non AUD investment. Please conduct the research on the long term historical returns and volatility of historical returns for those instruments. You need to compose a portfolio for your investment identifying what to buy and how much to buy. You are required to document the performance of investment portfolio from week 2 to week 10. Also document how much you will have in your country currency if you sell all your investments and convert to your country currency at the spot exchange rate at the end of week 10. At end of week 10, please suggest the method you will use to send money (for example, whether it is bank account to bank account, online transfer, or cash to account). Please list all the possible methods and conduct a thorough research in comparing cost effectiveness of different methods as well as disadvantages and advantages for each method.

Write a 2,500-word report on your key findings for global remittance experiment.
The report should be supported by the research related to one of the following topics:
The use of derivatives such as forwards, futures and options The forecasting of currency exchange rates and interest rate determinations Raising equity and debt capital globally Select articles from various sources such as journal papers, business or finance magazines or news reports or books. The chosen issues must be fairly current and not older than ten years. In first part of this report, the student should write a review of their experiments including the background introduction, the goal of this game, potential problems, the recommended course of actions and the key conclusions.
 

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