1. A multinational corporation would benefit issuing debt denominated in Japanese Yen if:

A. it has a large amount of payables denominated in Yen

B. it has a large amount of debt already denominated in Yen

C. a large amount of its revenues are denominated in Yen

D. most of its manufacturing assembly parts are purchased from Japanese firms and involved in Yen.

2. Which of the following would Not be a logical reason for a foreign firm to sponsor a level II ADR in the U.S.?

a. reduce the regulatory oversight of the firm

b. reduce the cost of capital for the firm

c. increase name recognition of the firm in the U.S.

d. increase demand for the firms equity and thus help support its price level

3. A U.S. firm has a debt obligation of 290 million payable in one year. The current spot rate is 113 per U.S. dollar and the one-year forward rate is 111 per U.S. dollar. Additionally, a one-year Call option on the Yen with a strike price of $0.0084 per yen can be purchased for a premium of 0.012 cent per yen. The risk-free money-market rate in Japan is 2.2% and the risk-free money-market rate in the U.S. is 4%. Calculate the U.S. dollar cost of meeting this obligation using a forward contract hedge.

4. Which of the following would NOT constitute a valid argument against firms hedging FX exposure?

a. FX markets are efficient and investors can properly value firms with FX exposure

b. Large swings in foreign exchange rates while not frequent, can sometimes result in large financial issues for firms and even bankrupts

c. Shareholders are able to diversify their exposure to FX fluctuations by investing in a portfolio of global and foreign firms

d. there are costs involved in implementing hedges and it also uses other firms resources such as employee work hours.

5. All of the following represent potential benefits associated with the cross-listing of a firm's stocks in a liquid foreign capital market, EXCEPT:

a. Lower regulatory costs

b. Higher demand for the firm's shares

c. Higher visibility for the firm

d. Larger investor base

Please answer ALL questions. Provide formula for Question 3. Will give thumbs up for all answers and correct answers. THANK YOU