Questions from Corporate Finance

Q: The key to managing operating exposure at the strategic level is for

The key to managing operating exposure at the strategic level is for management to recognize a disequilibrium in parity conditions when it occurs, and to be prepositioned to react most appropriately....

Q: Conceptually, how do the Sharpe and Treynor performance measures define risk

Conceptually, how do the Sharpe and Treynor performance measures define risk differently? Which do you believe is a more useful measure in an internationally diversified portfolio?

Q: As the newest member of the asset allocation team in your firm

As the newest member of the asset allocation team in your firm, you constantly find yourself being quizzed by your fellow group members. The topic is international diversification. One analyst asks yo...

Q: Firms with operations and assets across the globe, true MNEs,

Firms with operations and assets across the globe, true MNEs, are in many ways as international in composition as the most internationally diversified portfolio of unrelated securities. Why do investo...

Q: Explain how currency swaps can hedge foreign exchange operating exposure. What

Explain how currency swaps can hedge foreign exchange operating exposure. What are the accounting advantages of currency swaps?

Q: When you are constructing your portfolio, you know you want to

When you are constructing your portfolio, you know you want to include Cementos de Mexico (Mexico), but you cannot decide whether you wish to hold it in the form of ADRs traded on the NYSE, or directl...

Q: How does the diversification of a portfolio change its expected returns and

How does the diversification of a portfolio change its expected returns and expected risks? Is this in principle any different for internationally diversified portfolios?

Q: What types of risk are present in a diversified portfolio? Which

What types of risk are present in a diversified portfolio? Which type of risk remains after the portfolio has been diversified?

Q: How, according to portfolio theory, is the risk of the

How, according to portfolio theory, is the risk of the portfolio measured exactly?

Q: The currency risk associated with international diversification is a serious concern for

The currency risk associated with international diversification is a serious concern for portfolio managers. Is it possible for currency risk ever to benefit the portfolio’s return?