BFW 2341: Assessment 1: Forex Trading Simulation (30%)
Individual
You are encouraged to read the following information regarding AI before carry out the duty in this assignment
Generative AI tools are restricted for certain functions in this assessment task
In this assessment, you can use generative artificial intelligence (AI) in order to define the terms only, any use of generative AI must be
appropriately acknowledged (see Learn HQ).
Assignment Sheet
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Unit Name
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International Financial Management
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Unit Code
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BFW2341
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Unit Facilitator Name
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Dr Darniya Prabu
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Assignment Name
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Forex Simulation Trading
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Assignment Number/Reference
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Assessment 1
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Weightage
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30%
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Learning Outcomes
This assignment assesses the following learning outcomes:
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Learning
Outcome
Number
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Learning Outcome Description
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LO1
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Explore the international financial environment and the importance of foreign exchange risk management.
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LO3
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Demonstrate how foreign exchange market mechanisms can be used to hedge foreign currency transaction exposure.
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Weighting
This assignment is worth 30% of your overall grade for this unit.
Requirements
This assignment has the following requirements:
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Assignment Type
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Individual
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Response Format
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Written copy
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Response Specifications
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N/A
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Due Date
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23.55 pm (Malaysian Time), 29 August 2025
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Submission Process
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Submit with Moodle (3 files total)
1. Submit one PDF Document of this Report with all answers.
2. Submit a History Trader Report Downloaded from Metatrader.
3. Submit Excel File on Regression Analysis
4. All references should be provided at the end of the report.
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BFW2341 S2 2025 Forex Trading Simulation
Part 1: Trading currencies (40 marks)
Note: The use of Generative AI is Not Allowed in Part 1 of this assessment.
a) Fill in your transaction records (entry prices), increase rows if necessary. The duration of trade must be at least 10 days. Any trade duration lesser than 10 trading days will have a deduction in marks. The number of trades is up to the student but any trades and any
currency traded done must be well justified. (10 marks)
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Date
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Currency pair
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Order type
(market/limit)
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Volume (lot)
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Executed price
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Note: Please increase rows if necessary based on the trade history. Input all your trades done.
b) Fill in the historical price of the currency pair used to trade. Record the historical Weekly High and Weekly Low for 3 weeks for each currency traded. (10 marks)
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Date
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Currency pair
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Weekly High
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Weekly Low
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Note: Please increase rows if necessary. Watch Video Guidance on how to obtain Weekly High and Low for Every Currency Traded.
c) Reflect on your personal trading experience during the simulation period. Explain why you
chose to trade the specific currency pairs you did and what influenced your decisions, such
as familiarity, news events, volatility, or technical signals? Describe your overall trading
strategy and the key decisions you made, including how you responded to market
conditions and any challenges you faced. Assess how effective your approach was by
highlighting what worked, what did not, and how you managed risk throughout. Share what
you learned about your trading style and what improvements you would consider making
in future trades. Support your reflections with relevant examples or evidence and
references where possible. (20 marks)
Word Limit: 1000 words
Part 2: Short Essay Question (20 marks)
Note: The use of Generative AI is Restricted in Part 2 of this assessment. You may only use it for definitions. Any use of Generative AI must be acknowledged.
In this section, you are required to critically analyse the key factors that influenced the movement of only One of the currency pair you traded in Part 1. Go beyond basic explanations by examining how macroeconomic indicators, political developments, and market sentiment contributed to fluctuations in the exchange rate. Use real-life data or events to support your analysis, and clearly link how these factors were present during your trading period. Explain how they may have impacted your trading decisions, outcomes, or strategy adjustments throughout the duration. You may use references to support your answers.
Word Limit: 1000 words
(20 marks)
Part 3: Regression Analysis (40 marks)
Note: The use of Generative AI is Not Allowed in Part 3 of this assessment.
a) Conduct a regression analysis to estimate the relationship between the Exchange Rate (Dependent Variable) for the period 2000-2022 using annual data for any ONE of the following currency pairs; (20 marks)
i) Canada (Canadian Dollars to USD Spot Exchange Rate Annual) or
ii) Japan (Japanese Yen to USD Spot Exchange Rate Annual) or
iii) Singapore (Singapore Dollars to USD Spot Exchange Rate Annual)
The independent variables to be analysed are as follows;
• Constant Gross Domestic Product per capita
• Inflation, Consumer Prices (Percent)
• Central Government Debt (Percent of GDP)
The above database can be found at https://fred.stlouisfed.org/.
b) Interpret your regression results by explaining the relationship between the dependent variable (exchange rate) and the independent variables used in your model. Identify which factors have a statistically significant impact and discuss whether these relationships are positive or negative.
In your discussion, consider whether the results align with economic theories of currency valuation, particularly in relation to inflation, GDP per capita, and government debt. Support your analysis by referencing actual economic or financial events that occurred during your study period.
Provide a critical reflection on your model by discussing any limitations that may have affected the accuracy or reliability of your results. You may use references to further justify your answers where possible.
Word Limit: 1000 words
(20 marks)