Questions from Corporate Finance

Q: The term globalization has become very widely used in recent years.

The term globalization has become very widely used in recent years. How would you define it?

Q: How do the motivations of individuals, both inside and outside the

How do the motivations of individuals, both inside and outside the organization or business, define the limits of financial globalization?

Q: Name the four main types of transactions from which transaction exposure arises

Name the four main types of transactions from which transaction exposure arises.

Q: Why would anyone write an option, knowing that the gain from

Why would anyone write an option, knowing that the gain from receiving the option premium is fixed, but the loss, if the underlying price goes in the wrong direction, can be extremely large?

Q: Infrastructure weakness was one of the causes of the emerging market crisis

Infrastructure weakness was one of the causes of the emerging market crisis in Thailand in 1997. Define infrastructure weakness, and explain how it could affect a country’s exchange rate.

Q: Define the Fisher effect. To what extent do empirical tests confirm

Define the Fisher effect. To what extent do empirical tests confirm that the Fisher effect exists in practice?

Q: Define the international Fisher effect. To what extent do empirical tests

Define the international Fisher effect. To what extent do empirical tests confirm that the international Fisher effect exists in practice?

Q: Define interest rate parity. What is the relationship between interest rate

Define interest rate parity. What is the relationship between interest rate parity and forward rates?

Q: Describe four arguments in favor of a firm pursuing an active currency

Describe four arguments in favor of a firm pursuing an active currency risk management program.

Q: Define the terms covered interest arbitrage and uncovered interest arbitrage. What

Define the terms covered interest arbitrage and uncovered interest arbitrage. What is the difference between these two transactions?