1. What are some risks associated with doing business internationally? Given these risks, why do companies engage in international business?

2. Explain the difference between a spot and a forward rate of exchange.

3. If Citigroup, based in the United States, makes loans to a German corporation in Euros, which would benefit the most from a weaker or stronger U.S. dollar? Explain.

4. Briefly discuss how an increase in the value of the U.S. dollar would impact

a) A US investor with significant foreign investments

b) A foreign investor with significant US investments

c) The U.S. consumer

d) A US-based manufacturer that sells its products internationally

e) A foreign-based manufacturer that sells its products in the US.