| Course | FIN-3340 International Finance |
|---|---|
| Module | Module 1 |
| Paper type | Written assignment 1: the global financial environment |
| Length | About 594 words, 5 pages |
| Format | APA 7 student paper |
| School | Thomas Edison State University |
| Program | B.S.B.A. in Finance |
| Updated | October 2026 |
Free sample paper for FIN 3340 Module 1
First Oven to Santiago: The Global Financial Environment for a New Jersey Exporter
Student Name
B.S.B.A. in Finance, Thomas Edison State University
FIN-3340: International Finance
Mentor Name
Month Day, Year
First Oven to Santiago: The Global Financial Environment for a New Jersey Exporter
What Changes When a Firm Goes International
Eiteman et al. (2022) describe the multinational enterprise as a firm with operations or significant sales in more than one country, whose financial decisions must account for currencies, different capital markets, taxes and political systems. For Raritan, three new risks arrive with the Chilean sale. Currency risk: if the bakery chain pays in Chilean pesos, a weaker peso reduces Raritan's dollar revenue. Country risk: Chilean law, courts and policy now affect the sale. And financing choices widen: Raritan may borrow or invoice in pesos as well as dollars. Dunning (1988) explains that firms go abroad when they combine an ownership advantage with a location advantage and a reason to keep the activity in-house, which frames the oven maker's choice.
The firm's goal remains the same, maximizing value for its owners, but governance differs abroad. Raritan's prospective Chilean distributor is family-controlled, as many Latin American firms are. La Porta et al. (1998) found that the legal tradition of a country shapes how well outside investors and creditors are protected, which helps explain why ownership is more concentrated in civil-law countries such as Chile than in common-law countries such as the United States.
The International Monetary System
Today's system is a mix. The dollar, euro, yen and pound float freely; some currencies are pegged or managed; and many emerging market currencies, including Chile's, float with an inflation-targeting central bank.
| Period | System | Key feature |
|---|---|---|
| 1944-1971 | Bretton Woods | Currencies pegged to the dollar, the dollar convertible to gold at $35 an ounce |
| 1971-1973 | Collapse | The United States ended gold convertibility; pegs broke down |
| 1973-present | Managed and free floating | Major currencies float; others peg, band or float with intervention |
| 1999-present | The euro | A single currency for much of Europe, with one central bank |
Chile's Exchange Rate Regime
Chile's peso has floated since 1999, after years of a crawling band. The Central Bank of Chile targets inflation of 3 percent and intervenes in the currency market only in exceptional conditions. A floating regime means the peso can move substantially, in either direction, within months, which is the central currency risk for Raritan. As a major copper exporter, Chile's currency tends to weaken when copper prices fall, a pattern Raritan should watch. A free trade agreement between the United States and Chile, in force since 2004, removes tariffs on most goods, so Raritan's ovens can enter without duties that would otherwise affect pricing.
Reading the Balance of Payments
A country's balance of payments records all transactions between its residents and the rest of the world. The current account covers trade in goods and services, income and transfers; the financial account covers investment flows. A country with a persistent current account deficit must attract foreign capital to finance it, and if that capital becomes scarce, its currency usually weakens. For Raritan, the questions are whether Chile's current account deficit is modest and well financed by long-term investment, which supports a stable peso, or large and dependent on short-term flows, which raises the risk of a sharp depreciation. Chile's large copper exports and long record of foreign direct investment have generally supported its external position, though copper price swings move its current account.
Implications for the Sale
Raritan should decide early whether to invoice in dollars, shifting currency risk to the buyer, or in pesos, accepting it in exchange for a more competitive offer. That choice, and how to manage the risk if it accepts pesos, are the subjects of the next modules.
References
Dunning, J. H. (1988). The eclectic paradigm of international production: A restatement and some possible extensions. Journal of International Business Studies, 19(1), 1-31. https://doi.org/10.1057/palgrave.jibs.8490372
Eiteman, D. K., Stonehill, A. I., & Moffett, M. H. (2022). Multinational business finance (16th ed.). Pearson.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. (1998). Law and finance. Journal of Political Economy, 106(6), 1113-1155. https://doi.org/10.1086/250042
Reading the FIN 3340 Module 1 assignment instructions
The six FIN-3340 papers carry 30 percent, and each must cite readings and outside sources in APA style. Module 1, Global Financial Environment, covers the multinational firm and its goals, corporate governance, the international monetary system and the balance of payments. Expect conceptual questions applied to a firm or country. Dunning's eclectic paradigm, which explains why firms internationalize, is a useful framework for the opening question. The exporter and its sale here are composites; facts about Chile are general. Expect questions on the global financial environment a firm enters when it starts selling abroad: exchange rate systems, the balance of payments and international capital flows.
How this FIN 3340 Module 1 example is built
The paper opens with what changes when a firm sells abroad and how governance differs, citing research on legal traditions. A table traces the international monetary system from Bretton Woods to the euro. The Chile section describes its floating peso, inflation target, copper link and free trade agreement. The balance of payments section explains what the current and financial accounts reveal about currency risk, and a closing paragraph sets up the invoicing decision for later modules. Each concept is applied to the composite exporter's first sale abroad, so the answer reads as advice rather than a summary. A closing paragraph names the three facts about the country the exporter should watch.
FIN 3340 Module 1 rubric: what earns full marks
The globalization paper is graded on how well each concept informs the oven maker's export plans. Mentors look for accurate explanations of the multinational's goals and governance, the monetary system and the balance of payments, applied to a specific firm and country. References to the textbook and other sources in APA format are required by the syllabus. Tying each idea to a choice the oven maker must make, rather than touring the chapter, is what earns the top band. Mentors give credit for accurate concepts applied to a firm's decisions, with current data on the country involved. Clear sources for each figure support the advice. Papers that read the balance of payments for a specific country the firm plans to enter show applied understanding.
FIN 3340 Module 1 help from the desk
First-module papers lose points for describing the history of the monetary system without connecting it to today's regimes, for treating all emerging market currencies alike and for skipping the balance of payments or describing it only as accounting. Explain the target country's actual exchange rate regime. Say what its balance of payments implies for its currency. Tie each concept to the firm's sale or investment. Cite your sources in APA format. A free first sample of your own FIN-3340 Module 1 assignment is available on request. Use current exchange rate and balance of payments data, and explain what each means for the exporter. Keep the answer focused on the firm's first sale.
Write yours, or have the desk draft it
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FIN 3340 Module 1 questions, answered
Where can I find a free FIN 3340 Module 1 sample paper?
The deck oven exporter paper above explains the multinational's goals, the monetary system from Bretton Woods, Chile's floating peso and what the balance of payments says about currency risk.
What was the Bretton Woods system?
A post-1944 system of currencies pegged to the U.S. dollar, which was convertible to gold at $35 an ounce, until it ended in the early 1970s.
What does the balance of payments show?
Every payment between a nation's residents and foreigners, recorded in a current account and a financial account.
Why does corporate governance differ across countries?
Legal traditions, investor protections and ownership patterns vary, so firms abroad are often family- or state-controlled.
What textbook does FIN-3340 use?
Eiteman, Stonehill and Moffett's Multinational Business Finance, sixteenth edition.