case study / same question a , b,c

Case #2 Carrefour the French Supermarket chain has established retail outlets worldwide. These outlets are massive and contain products purchased locally as well as imports. As Carrefour generates earnings beyond what it needs abroad, it may remit those earnings back to France. Carrefour is likely to build additional outlets especially in China. a. Explain how the Carrefour outlets in China would use the spot market in foreign exchange. spot market to convert excess earnings denominated in yuan into euros, which would be remitted to the French parent. b. Explain how Carrefour might utilize the international money markets when it is establishing other Carrefour stores in Asia. ANSWER: Carrefour may need to maintain some deposits in the Eurocurrency market that can be used (when needed) to support the growth of Carrefour stores in various foreign markets. When some Carrefour stores in foreign markets need funds, they borrow from banks in the Eurocurrency market. Thus, the Eurocurrency market serves as a deposit or lending source for Carrefour and other MNCs on a short-term basis. (Eurocurrency refers to international currencies, most likely the dollar, not just the euro!) c. Explain how Carrefour could use the international bond market to finance the establishment of new outlets in foreign markets