CHI: Q1. The valuation of an MNC should rise when an event causes the expected cash flows from foreign to __and when foreign currencies denominating these cash flows are expected to decrease Increase precio decrease: depresion increase: depreciate Q2. Explain the agency problem of MNCs and Why might agency costs be larger for an MNC than for a purely domestic firm? Q3. Explain how the theory of comparative advantage relates to the need for international business. Q4. Why are costs normally higher for MNCs than for purely domestic firms? Explain Q5. How do firms engage in international business? Explain Q6. Are MNCs cash flow and cost of capital exposed to any uncertainty? Explain your answer. CH3: QI.Utah Bank's bid price for Canadian dollars is 5.7938 and its ask price is 5.81. What is the bid'ask percentage spread? Q2. If the direct exchange rate of the curo is $1.25, what is the euro's indirect exchange rate? That is, what is the value of a dollar in curos? Q3. Assume Poland's currency (the zloty) is worth $.17 and the Japanese yen is worth 5.008. What is the cross rate of the zloty with respect to yen? That is, how many yen equal a zloty? 04. You just came back from Canada, where the Canadian dollar was worth $.70. You still have CS200 from your trip and could exchange them for dollars at the airport, but the airport foreign exchange desk will only buy them for 5.60. Next week, you will be going to Mexico and will need pesos. The airport foreign exchange desk will sell you pesos for S. 10 per peso. You met a tourist at the airport who is from Mexico and is on his way to Canada. He is willing to buy your CS200 for 1,300 pesos. Should you accept the offer or cash the Canadian dollars in at the airport? Explain. 05. Explain why firms may issue stock in foreign markets