Question
wherever possible please explain answers bit deep please 1) Consider the various assumptions and limitations and the core concept of the theory of comparative advantage.
wherever possible please explain answers bit deep please
1) Consider the various assumptions and limitations and the core concept of the theory of comparative advantage. Do you think the theory is of any value to managers of a multinational enterprise (MNE) in the modern context? Why or why not? Explain.
2)Classify the following as a transaction reported in a sub-component of the current account, or the capital and financial accounts of the two countries involved:
i.A Japanese tourist pays for a tour package with an Australian tour operator.
ii.An Australian company buys 100% shares of a German company.
iii.An Australian company imports mobile phones from a U.S. seller.
iv.An Australian company sells bonds to a U.S. customer.
v.An Australian resident purchases a laptop from an Australian retailer.
vi.A U.S. investor purchases 2% shares of an Australian company.
vii.A tourist from Japan purchases a souvenir from an Australian gift shop.
(3)Compare among central banks, dealers, and brokers concerning their motives and operations in the foreign exchange market.
4)Is direct invention in the foreign exchange market always effective? Explain.
5)Discuss the interest rate parity theory. Is the theory useful to an investor and to an MNE? Explain.
(6)Differentiate between dollarization and currency board arrangement with relevant discussions and examples.
7)Discuss similarities and dissimilarities between cross-currency swaps and parallel loans strategies of managing operating exposure.
8)Between country-specific political risks and global political risks for an MNE, which risk type is more difficult to predict and manage? Explain your views.
9)Discuss two reasons that may cause market segmentation. Does market segmentation impact an MNE in any manner? Explain your views.
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