Scribd
Upload
46 views8 pages

Parmalat Case Study & Finance Exercises

The document discusses two tasks related to international finance. For task 1, it analyzes the key requirements of the Cadbury Code in the UK, which led to corporate governance reform by separating the roles of board president and CEO and requiring at least three outside board members. This strengthened monitoring and reduced agency problems. For task 2, it examines Parmalat's accounting fraud in Italy, noting how international banks and auditors failed to properly investigate the company's financial status, indirectly enabling its collapse. It restates some euro currency forward quotes in points and calculates the corresponding bid-ask spreads.

Uploaded by

gerardo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
46 views8 pages

Parmalat Case Study & Finance Exercises

The document discusses two tasks related to international finance. For task 1, it analyzes the key requirements of the Cadbury Code in the UK, which led to corporate governance reform by separating the roles of board president and CEO and requiring at least three outside board members. This strengthened monitoring and reduced agency problems. For task 2, it examines Parmalat's accounting fraud in Italy, noting how international banks and auditors failed to properly investigate the company's financial status, indirectly enabling its collapse. It restates some euro currency forward quotes in points and calculates the corresponding bid-ask spreads.

Uploaded by

gerardo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 8

Finanzas Internacionales

Ejercicios de la tarea 2

Gerardo Bonilla Carrillo

Maestría en Finanzas
11 de mayo de 2020
nacionales

a tarea 2

A01685351

Finanzas
de 2020

Profesor titular: Dr. Gerardo C. Salazar Viezca

Profesora Tutora: M. Karla Macías González


7. The Cadbury Code of Best Practice, adopted in the United Kingdom, led to a successful reform of
corporate governance in the country. Explain the key require-ments of the code and discuss how it
contributed to the success of reform.

The Code requires that the presiden of the board and CEO be worked by two different individuals, and
that there have to be at least three outside board members. The recommended board structure helped
to strengthen the monitoring function of the board and take away the agency problem.

Mini caso “Parmalat: la Enron de Europa”


1. How was it possible for Parmalat managers to “cook the books” and hide it for so long?
In addition to the low level of accounting transparency that occurs in Italy, Parmalat was able to cook the
books

2. Investigate and discuss the role that international banks and auditors might have played in Parmalat’s
collapse

Calisto Tanzi, the imprisoned founder of Parmalat, made the serious mistake of asking Fausto Tonna, one of the
members of the board of directors, to never comment on the seriousness of the financial situation, let alone the exact
techniques used to hide it. The company, with the intention of selling the club as part of its restructuring plan, was the
signal for international auditors and banks to start with the investigation of the company's financial status and
discover the reality of the company at a better time before arriving. to bankruptcy, so international banks and auditors
failed to do due diligence, indirectly contributing to Parmalat's failure.
Tonna, one of the
tion, let alone the exact
tructuring plan, was the
ncial status and
tional banks and auditors
4. Restate the following one-, three-, and six-month outright forward European term bid-ask quotes in forward p

Spot 1.3431 - 1.3436


One-month 1.3432 - 1.3442
Three-month 1.3448 - 1.3463
Six-month 1.3488 - 1.3508

Soluction
One-month 1 - 6
Three-month 17 - 27
Six-month 57 - 72

5. Using the spot and outright forward quotes in problem 4, determine the corre-sponding bid-ask spreads in poi

Solution
Spot 5
One-month 10
Three-month 15
Six-month 20
d-ask quotes in forward points.

ing bid-ask spreads in points.

You might also like