Fire 416 Midterm 1

FIRE 416 Midterm 1 Review Outline 1. entreat off the importance of transnational business activity to plumping corporations. What ar the types of opportunities sought by aspiring multinational companies? What argon the risks faced by these companies which argon specific to the planetary spirit 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 true up about the race between the US dollar and the Euro at this qualify rate? 3.A US multinational company is inevitable to overlay its financial results in US dollars. How does this create capital 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 foreign commerce. 5.The price of a currency frontwards contract is obstinate by the relat ionship 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. let off your response. 6.Company ABC commits to sell $10 meg of its output (produced in the US with raw materials from the US) to a Japanese knob 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 currency markets which would erode the profitability of this sale? How can ABC cling to itself from the adverse consequences of currency market fluctuations? 7.Distinguish between forward contracts, futures, 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 smudge how ! the risks...If you want to get a full essay, order it on our website: OrderEssay.net

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