Questions from Financial Management

Q: How is the direct foreign investment decision made? What are the

How is the direct foreign investment decision made? What are the inputs to this decision process? Are the inputs more complicated than those for the domestic investment decision? Why or why not?

Q: A corporation desires to enter a particular foreign market. The direct

A corporation desires to enter a particular foreign market. The direct foreign investment analysis indicates that a direct investment in the plant in the foreign country is not profitable. What other...

Q: Referring back to Regardless of Your Major: Working in a Flat

Referring back to Regardless of Your Major: Working in a Flat World on page 608, why do businesses operate internationally, and what different types of businesses tend to operate in the international...

Q: Referring back to Finance for Life: International Investing on page 620

Referring back to Finance for Life: International Investing on page 620, why is the diversification that international investing provides to individual investors of value?

Q: What are the markets and mechanics involved in engaging in simple arbitrage

What are the markets and mechanics involved in engaging in simple arbitrage?

Q: Define exchange rate risk and political risk.

Define exchange rate risk and political risk.

Q: What steps can a firm take to reduce foreign exchange rate risk

What steps can a firm take to reduce foreign exchange rate risk? Indicate at least two different techniques.

Q: The forward rate for the Indian currency, the rupee, is

The forward rate for the Indian currency, the rupee, is not quoted in the New York exchange market. If you were exposed to exchange risk in rupees, how could you cover your position?

Q: The Shome Corporation is considering a new project that involves the introduction

The Shome Corporation is considering a new project that involves the introduction of a new product. The firm in in the 34 percent marginal tax bracket and has a 15 percent required rate of return or d...

Q: In Regardless of Your Major: Welcome to a Risky World on

In Regardless of Your Major: Welcome to a Risky World on page 634, the need to engage in risk management was linked to the day-to-day activities of firm employees from multiple functional areas, inclu...