1. International Financial Markets Walmart has established two retail outlets in the city of Shanzen, China, which has a population of 3.7 million. These outlets are massive and contain imports in addition to products purchased locally. As Walmart generates earnings beyond what it needs in Shanzen, it may remit those earnings back to the United States. Walmart is likely to build additional outlets in Shanzen or in other Chinese cities in the future.

a. Explain how the Walmart outlets in China would use the spot market in foreign exchange.

b. Explain how Walmart might use the international money markets when it is establishing other Walmart stores in Asia.

c. Explain how Walmart could use the international bond market to finance

2. Transparency and Stock Trading Activity. Explain the relationship between transparency of firms and investor participation (or trading activity) among stock markets. Based on this relationship, how can governments of countries increase the amount of trading activity (and therefore liquidity) of their stock markets?