Questions from Financial Management

Q: How are foreign exchange transactions between international banks settled?

How are foreign exchange transactions between international banks settled?

Q: Discuss some of the pros and cons of countertrade from the country’s

Discuss some of the pros and cons of countertrade from the country’s perspective and the firm’s perspective.

Q: Discuss the basic motivations for a counterparty to enter into a currency

Discuss the basic motivations for a counterparty to enter into a currency swap.

Q: Many companies grant stock or stock options to managers. Discuss the

Many companies grant stock or stock options to managers. Discuss the benefitsand possible costs of using this kind of incentive compensation scheme.

Q: Why does most interbank currency trading worldwide involve the U.S

Why does most interbank currency trading worldwide involve the U.S. dollar?

Q: Discuss the advantages and disadvantages of the gold standard.

Discuss the advantages and disadvantages of the gold standard.

Q: Banks find it necessary to accommodate their clients’ needs to buy or

Banks find it necessary to accommodate their clients’ needs to buy or sell FXforward, in many instances for hedging purposes. How can the bank eliminate thecurrency exposure it has created for itself...

Q: A CAD/$ bank trader is currently quoting as mall figure bid

A CAD/$ bank trader is currently quoting as mall figure bid-ask of 35–40, whenthe rest of the market is trading at CAD1.3436–CAD1.3441. What is impliedabout the trader’s beliefs by his prices?

Q: Explain the mechanism that restores the balance-of-payments equilibrium

Explain the mechanism that restores the balance-of-payments equilibrium when it is disturbed under the gold standard.

Q: Recent surveys of corporate exchange risk management practices indicate thatmany U.

Recent surveys of corporate exchange risk management practices indicate thatmany U.S. firms simply do not hedge. How would you explain this result?