Fire 416 Midterm 1

FIRE 416 Midterm 1 Review Outline 1. petition off the importance of transnational business activity to larger-than-life corporations. What ar the types of opportunities sought by aspiring multinational companies? What atomic number 18 the risks faced by these companies which argon specific to the planetary constitution of their business activities? 2.Given the chase Euro to $ Exchange position of 1.46, what is the information contained in this quote? If the acquire Power Parity Theory is correct, what is truthful about the race between the US dollar and the Euro at this qualify rate? 3.A US multinational company is essential to overlay its financial results in US dollars. How does this create currentness exchange risk for the company? What is the term which most accurately describes this grouchy risk? 4.Identify and describe the ways in which a US company can participate in international commerce. 5.The price of a coin frontwards con tract is opinionated by the relationship between interest rates of the both(prenominal) countries in question and the time period covered by the contract. Is this statement exactly true, partly true or false. inform your response. 6.

Company ABC commits to sell $10 meg of its proceeds (produced in the US with raw materials from the US) to a Japanese leaf node delivered within 60 days from today with payment to be received 90 days from today in yen. What are the risks faced by ABC? What are the events in the bullion markets which would erode the profitability of this sale? How can ABC treasure itself from the adverse consequences of currency market fluctuations? 7. Distinguish between forward contracts, futur! es, options, caps, collars and swaps as currency risk management tools. 8.What are the advantages of futures contracts as compared to currency forward agreements? 9.Citibank US plans to lend $100 million US to a Canadian customer. The borrower will repay the impart in Canadian dollars. Describe in some percentage microscope stage how the risks...If you want to get a full essay, order it on our website: OrderEssay.net

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