The role of multinations is increasing as the world become more integrated. The same basic principles of financial management apply to multinational corporations as well as to domestice, but financial managers of multinational Pirms tace a much more complex task From a financial standpoint, the primary problem is that cash news must cross national boundaries. These cash flows may be constrained in various ways and their values in das may rise ar falt depending on exchange rate luctuations. Additional risks to considerare country risk, exchange rate risk, and political risk. Country risk the risk that are from investing or doing business in a particular country. Exchange rate risk is the that exchange rate changes will reduce the number of dollars provided by a given amount of a foreign currency Political risk represents the potential actions by a fost government that would reduce the value of a company's investment. Multinational ancial managers must be aware of the interactions among national Economics and their effects on international operations Every country has a monetary system and monetary authority of countries are to trade with one another, there must be some sort of system designed to facilitate payments between countries. The system is the framework within which exchange rates are determined. It is the blueprint for international trade and capital An exchange rate as the murder of units of a yven currency that can be purchased for one wit of another currency. There are two ways te state the exchange rate between two currencies in the American terror Burea terms. One currency is designated the home currency and the other designated as the foreign currency. These designations are arbarory; however, in this book the home currency is sumed to be the US dollar les stated otherwiec.) The home currency price of the unit of the foreign currency la calida) -Seine quotation. To a person who considers the U.S. to be hone, American representan) Selectation. On the other hand, the foreign currency price of the unit of the home currency is called a Select quotation, European tema represent select quotations to people in the US Select exchange rates the quoted price for a unit of foreign currency to be delivered within a very short period of time. ASelect exchange rate is the custed price for a unit of foreign currency to be delivered at aspected at the future. The strate exchange rate between any twocurrencies Quantitative Problem 1. Suppose that Swedish Krona could be purchased in foreign exchange market today for $0.00. the krenariated tomorrow paint the core, many one would do buy tomorrow? Do not undermediate action. Round your wer to two decimales Quantitative Problem 2. Suppose the exchange rate between the US dollar and the South African and wo 14 rand and the exchange rate between the U.S. down the whole was the 10:25 What was the exchange rate between South African rand and the wall art rond termediate caktuations. Round your own places rands