All Matches

Solution Library

Expert Answer

Textbooks

Search Textbook questions, tutors and Books

Oops, something went wrong!

Change your search query and then try again

Result Not Found

Books FREE
Tutors
Study Help
Hire a Tutor
AI Study Help New

Search
Sign In
Register

study help
business
multinational business finance

Questions and Answers of Multinational Business Finance

TED Spread in the Global Financial Crisis. During financial crises, short-term interest rates will often change quickly (typically up) as indications that markets are under severe stress. The
Stapleton’s Mortgage. Frank Stapleton pays £406,000 for a four-bedroom bungalow on the outskirts of Edinburgh, Scotland. He plans to make a 20% down payment but is having trouble deciding whether
BBC (Australia). Botany Bay Corporation (BBC)of Australia seeks to borrow US$30,000,000 in the eurodollar market. Funding is needed for two years.Investigation leads to three possibilities. Compare
DaimlerChrysler Debt. Chrysler LLC, the now privately held company sold off by DaimlerChrysler, must pay floating-rate interest three months from now. It wants to lock in these interest payments by
O’Reilly and CB Solutions. Heather O’Reilly, the treasurer of CB Solutions, believes interest rates are going to rise, so she wants to swap her future floating-rate interest payments for fixed
Sovereign Debt Negotiations. The Greek government is considering a €150 million loan for a four-year maturity.It will be an amortizing loan, meaning that the interest and principal payments in
Saharan Debt Negotiations. The country of Sahara is negotiating a new loan agreement with a consortium of international banks. Both sides have a tentative agreement on the principal—$220 million.
Delos Debt Renegotiations (A). Delos borrowed €80 million two years ago. The loan agreement, an amortizing loan, was for six years at 8.625% interest per annum. Delos has successfully completed two
Delos Debt Renegotiations (B). Delos is continuing to renegotiate its prior loan agreement (€80 million for six years at 8.625% per annum), two years into the agreement. Delos is now facing serious
Carlos and Wilmsberg Inc. Carlos and Wilmsberg Inc.is a rapidly growing import-export firm. It decided to borrow €35,000,000 via a euro-euro floating-rate loan for 4 years. Carlos and Wilmsberg
Firenza Motors (Italy). Firenza Motors of Italy recently took out a 4-year €5 million loan on a floating-rate basis. It is now worried, however, about rising interest costs. Although it had
Lluvia and Paraguas. Lluvia Manufacturing and Paraguas Products both seek funding at the lowest possible cost. Lluvia would prefer the flexibility of floating-rate borrowing, while Paraguas wants the
Aidan’s Cross-Currency Swap: Norwegian Krone for Euros. Aidan Corporation entered into a 3-year crosscurrency interest rate swap to receive euros and pay Norwegian krone. Aidan, however, decided to
Aidan’s Cross-Currency Swap: Yen for Euros. Use the table of swap rates in the chapter, and assume Aidan enters into a swap agreement to receive euros and pay Japanese yen, on a notional principal
Takashima Auto Parts (Japan). Takashima Auto Parts is a Japanese-based automotive parts supplier and was spun off from Toyota in 2007. With annual sales of ¥30 billion, the company has expanded its
UAE Small Business Loan (A). Mohammad tried one last time to explain the loan structure offered by the company’s Emirates bank. His boss just stared at him. Mo explained the detailed calculation of
Financial Derivatives and the Bank for International Settlements. The Bank for International Settlements(BIS) regularly provides current data on financial derivative use globally. Use the following
Risk Management of Financial Derivatives. If you think this book is long, take a look at the freely downloadable U.S. Comptroller of the Currency’s handbook on risk management related to the care
Interbank Spreads. The European Union provides regular data updates on the spreads paid in the interbank market. Use the following website to observe how these spreads change during volatile periods
Chicago Mercantile Exchange. The Chicago Mercantile Exchange trades futures and options on a variety of currencies, including the Brazilian real. Use the following site to evaluate the uses of these
Implied Currency Volatilities. The single unobservable variable in currency option pricing is the volatility, since volatility inputs are the expected standard deviation of the daily spot rate for
Montreal Exchange. The Montreal Exchange is a Canadian exchange devoted to the support of financial derivatives in Canada. Use its website to view the latest on MV (minimum variance) volatility, the
Explore the three major theoretical approaches to exchange rate determination?
Detail how and why direct and indirect foreign exchange market intervention is conducted by central banks?
Analyze the primary causes of exchange rate disequilibrium in emerging market currencies?
Observe how forecasters combine technical analysis with the three major theoretical approaches to forecasting exchange rates?
Exchange Rate Determination. What are the three basic theoretical approaches to exchange rate determination?
PPP Inadequacy. The most widely accepted theory of foreign exchange rate determination is purchasing power parity, yet it has proven to be quite poor at forecasting future spot exchange rates. Why?
Data and the Balance of Payments Approach. Statistics on a country’s balance of payments are often used by the business press and by business itself for predicting exchange rates, but the academic
Supply and Demand. Which of the three major theoretical approaches seems to put the most weight on the supply and demand for currency? What is its primary weakness?
Asset Market Approach to Forecasting. Explain how the asset market approach can be used to forecast spot exchange rates. How does the asset market approach differ from the balance of payments
and detailed in Chapter 3) to forecasting?
Traders versus Investors. How do you distinguish between traders and investors?
Financial Analysis. What is the difference between technical and fundamental analysis?
Intervention Motivation. Why do governments and central banks intervene in the foreign exchange markets?If markets are efficient, why not let them determine the value of a currency?
Direct Intervention Usefulness. When is direct intervention likely to be the most successful? And when is it likely to be the least successful?
Capital inflow volatility. Can governments dampen capital inflow volatility in emerging nations?
Capital Controls. Are capital controls really a method of currency market intervention, or more of a denial of activity? How does this fit with the concept of the impossible trinity discussed
Asian Crisis of 1997 and Disequilibrium. What was the primary disequilibrium at work in Asia in 1997 that likely caused the Asian financial crisis? Do you think it could have been avoided?
Motivations for Currency Market Intervention. Why and when do central banks intervene in currency markets?
Currency Crises. Compare and contrast the currency crises of Russia in 1998 and Argentina in 2002.
Term Forecasting. What are the major differences between short-term and long-term forecasts for a fixed exchange rate versus a floating exchange rate?
Inflationary nations. Why are most export prices in inflationary nations quoted in terms of stable currencies?
Speculation and Financial Crises. Excessive currency speculation has been named among the factors blamed for the onset of financial crises. Give three examples where rampant speculation has given
Cross-Rate Consistency in Forecasting. Explain the meaning of “cross-rate consistency” as used by MNEs. How do MNEs use a check of cross-rate consistency in practice?
Stabilizing Versus Destabilizing Expectations.Define stabilizing and destabilizing expectations, and describe how they play a role in the long-term determination of exchange rates.
Ecuadorian Sucre. The Ecuadorian sucre (S) suffered from hyper-inflationary forces throughout 1999. Its value moved from S5,000/$ to S25,000/$. What was the percentage change in its value?
Canadian Dollar/USD Dollar. The Canadian dollar’s value against the U.S. dollar has seen some significant changes over recent history. Use the following graph of the C$/US$ exchange rate for the
Nigerian Naira’s Nightmare. On Friday, June 17, 2016, the Central Bank of Nigeria (CBN) abandoned the Nigerian naira’s (NGN or N) fixed exchange rate and allowed the currency to float. Previously
Istanbul’s Issues. The Turkish lira (TL) was officially devalued by the Turkish government in February 2001 during a severe political and economic crisis. The Turkish government announced on
Zimbabwean Devaluation. As illustrated in the graph at the top of this page, the Zimbabwe dollar depreciated against the euro from ZWD 460.52 to ZWD 515.49 in a span of three months. After a brief
Bangkok Broken. The Thai baht (THB) was devalued by the Thai government from THB25/$ to THB29/$ on July 2, 1997. What was the percentage devaluation of the baht?
Reais Crisis. The value of the Brazilian reais (BRL or R$) was BRL 1.80 to 1.00 USD on Thursday January 24, 2008. It then plunged in value to BRL 2.39 to 1.00 USD on January 26, 2009. What was the
Conchita’s Dilemma. Conchita Marquez is a famous Mexican entrepreneur with a multi-million-dollar business dealing in copper. In 1994, she decided to take up residence in Switzerland as part of her
La Conquista—The Mexican Dance. Calculate the percentage change in the value of the peso for the three different cross-rates shown in the table for the six dates. Did the peso fall further against
BP and Mexicana Oil 1995. BP (UK) and Mexicana Oil (Mexico) severed a long-term joint venture in 1993, with Mexicana buying out BP with $75 billion in cash and a 30% interest (equity interest) in
Current Spot Rates. What are the current spot exchange rates for the following cross-rates?a. Japanese yen/U.S. dollar exchange rateb. Japanese yen/Australian dollar exchange ratec. Australian
Purchasing Power Parity Forecasts. Assuming purchasing power parity, and that the forecasted change in consumer prices is a good proxy of predicted inflation, forecast the following cross-rates:a.
International Fisher Forecasts. Assuming International Fisher—one version of Purchasing Power Parity—applies to the coming year, forecast the following future spot exchange rates using the
Implied Real Interest Rates. If the nominal interest rate is the government bond rate, and the current change in consumer prices is used as expected inflation, calculate the implied “real” rates
Forward Rates. Using the spot rates and 3-month interest rates in the table, calculate the 90-day forward rates for:a. Japanese yen/U.S. dollar exchange rateb. Japanese yen/Australian dollar exchange
Real Economic Activity and Misery. Calculate the country’s Misery Index (unemployment + inflation)and then use it like an interest differential to forecast the future spot exchange rate, one year
The Rising Sun and Europe. The Japanese yen-euro cross-rate is one of the more significant currency values for global trade and commerce. The following graph shows this cross-rate from when the euro
Financial Forecast Center. The Financial Forecast Center offers a variety of exchange rate and interest rate forecasts for business policy use. Use the Center’s website and data for the dollar/euro
Recent Economic and Financial Data. Use the following websites to obtain recent economic and financial data used for all approaches to forecasting presented in this chapter.Economist.com
Trading Economics. Trading Economics is a private firm that generates regular foreign exchange rate forecasts for major currency pairs. Use the following website to explore how the euro is expected
Exchange Rates, Interest Rates, and Global Markets.The magnitude of market data can seem overwhelming on occasion. Use the following Bloomberg markets page to organize your mind and your global
Banque Canada and the Canadian Dollar Forward Market. Use the following website to find the latest spot and forward quotes of the Canadian dollar against the Bahamian dollar and the Brazilian
Explore the multitude of functions of the foreign exchange market
Detail how the structure of the global foreign exchange market has evolved
Describe the financial and operational transactions conducted in the foreign exchange market
Examine the forms of currency quotations used by currency dealers, financial institutions, and agents of all kinds when conducting foreign exchange transactions
Structure of the FX Market. How is the global foreign exchange market structured? Is digital telecommunication replacing people?
Foreign Exchange Market Characteristics. With reference to foreign exchange turnover in 2013:a. Rank by volume the relative size of spot, forwards, and swaps.b. List the five most important
Foreign Exchange Rate Quotations. Define and give an example of each of the following:a. Bid rate quoteb. Ask rate quote
American and European Terms. With reference to interbank quotations, what is the difference between American terms and European terms?
Direct and Indirect Quotes. Define and give an example of the following:a. Direct quote between the U.S. dollar and the Mexican peso, where the United States is designated as the home country.b.
Anne Dietz at Changi #3 (Singapore). Anne Dietz lives in Singapore, but is making her first business trip to Sydney, Australia. Standing in Singapore’s new terminal #3 at Changi Airport, she looks
Konbanwa Sushi (Japan). The Japanese sushi franchise, Konbanwa Sushi, will be receiving six payments of €2,500,000 from now to 12 months in the future.Since the company keeps cash balances in both
Japanese Yen Forward. Use the following spot and forward bid-ask rates for the Japanese yen/U.S. dollar(¥/$) exchange rate from September 16, 2010, to answer the following questions:a. What is the
Andreas Broszio (Geneva). Andreas Broszio just started his job as an analyst for Credit Suisse in Geneva, Switzerland. He receives the following quotes for Swiss francs against the dollar for spot, 1
Study Abroad: Paris to Moscow. On your summer study abroad program in Europe, you stay an extra two weeks to travel from Paris to Moscow. You leave Paris with 2,000 euros (€ or EUR) in your belt
Summer Abroad: Moscow to Mumbai. After spending a week in Moscow, you get an email from your friend in India. He can get you a really good deal on a plane ticket and wants you to meet him in Mumbai
Asian Pacific Crisis (1997). The Asian financial crisis that began in July 1997 wreaked havoc throughout the currency markets of East Asia.a. Which of the currencies in the table had the largest
Bloomberg Cross Rates. Use the table from Bloomberg below to calculate each of the following:a. Japanese yen per U.S. dollarb. U.S. dollars per Japanese yenc. U.S. dollars per eurod. Euros per U.S.
Bid/Ask on Swiss franc/Euro Forwards. Use the following spot and forward bid-ask rates for the Swiss franc/euro (CHF/€) from October 28, 2019, to answer the following questions:a. What is the
Bid/Ask on Aussie Dollar Forward. Use the following spot and forward bid-ask rates for the U.S.dollar/Australian dollar (US$ = A$1.00) exchange rate from December 10, 2010, to answer the following
Vienna Corporate Treasury. A corporate treasury working out of Vienna with operations in New York simultaneously calls Citibank in New York City and Barclays in London. The banks give the following
Indirect Forward Premium on the Australian dollar.Calculate the forward premium on the Australian dollar (the Australian dollar is the home currency) if the spot rate is €0.6151/A$ and the 3-month
Direct Forward Discount on the Dollar. Calculate the forward discount on the dollar (the dollar is the home currency) if the spot rate is $1.5800/£ and the 6-month forward rate is $1.5550/£.
Mexican Peso–European Euro Cross Rate. Calculate the cross rate between the Mexican peso (Ps) and the euro (€) from the following spot rates: Ps12.45/$ and€0.7550/$.
Pura Vida. Calculate the cross rate between the Costa Rican colón C and the Canadian dollar C$from the following spot rates: C500.29/US$ and C$1.02/US$.
Bank for International Settlements. The Bank for International Settlements (BIS) publishes a wealth of effective exchange rate indices. Use its database and analyses to determine the degree to which
Forward Quotes. BarChart foreign exchange services provide representative forward rates on a multitude of currencies online. Use the following website to search out forward exchange rate quotations
Federal Reserve Statistical Release. The United States Federal Reserve provides daily updates of the value of the major currencies traded against the U.S. dollar on its website. Use the Fed’s
Daily Market Commentary. Many different online currency trading and consulting services provide daily assessments of global currency market activity.Use the following GCI site to find the market’s
BIS Triennial Central Bank Survey. The BIS conducts a survey of central banks every three years on the size and activities of the world’s foreign exchange markets. Use the BIS website below to
Examine how price levels and price level changes (inflation) in countries determine the exchange rates at which their currencies are traded
Show how interest rates reflect inflationary forces within each country and drive currency exchange rates
Explain how forward markets for currencies reflect expectations held by market participants about the future spot exchange rate

Showing 3800 - 3900 of 5575

First
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Last

Services

Sitemap
Fun
Definitions
Become Tutor
Study Help Categories
Recent Questions
Expert Questions

Company Info

Security
Copyrights
Privacy Policy
Terms & Conditions
SolutionInn Fee
Scholarship

Get In Touch

About Us
Contact Us
Career
Jobs
FAQ
Campus Ambassador

Secure Payment

Download Our App

© 2024 SolutionInn. All Rights Reserved