Questions from Financial Management

Q: Explain how the existence of the euro may affect U.S

Explain how the existence of the euro may affect U.S. international trade

Q: When South Korea’s export growth stalled, some South Korean firms suggested

When South Korea’s export growth stalled, some South Korean firms suggested that South Korea’s primary export problem was the weakness in the Japanese yen. How would you interpret this statement?

Q: Explain why an MNC may invest funds in a financial market outside

Explain why an MNC may invest funds in a financial market outside its own country

Q: If the direct exchange rate of the euro is $1.

If the direct exchange rate of the euro is $1.25, what is the euro’s indirect exchange rate? That is, what is the value of a dollar in euros?

Q: Assume Poland’s currency (the zloty) is worth $0.

Assume Poland’s currency (the zloty) is worth $0.17 and the Japanese yen is worth $0.008. What is the cross exchange rate of the zloty with respect to yen? That is, how many yen equal one zloty?

Q: Explain how syndicated loans are used in international markets

Explain how syndicated loans are used in international markets

Q: Explain the process used by banks in the Eurocredit market to determine

Explain the process used by banks in the Eurocredit market to determine the rate to charge on loans.

Q: What is the function of the international money markets? Briefly describe

What is the function of the international money markets? Briefly describe the reasons for the development and growth of the European money market. Explain how the international money, credit, and bond...

Q: Briefly describe the historical developments that led to floating exchange rates as

Briefly describe the historical developments that led to floating exchange rates as of 1973.

Q: a. Explain the agency problem of MNCs. b.

a. Explain the agency problem of MNCs. b. Why might agency costs be larger for an MNC than for a purely domestic firm?