Questions from Multinational Business Finance

Q: Capital budgeting for a foreign project uses the same theoretical framework as

Capital budgeting for a foreign project uses the same theoretical framework as domestic capital budgeting. What are the basic steps in domestic capital budgeting?

Q: A foreign subsidiary does not have an independent cost of capital.

A foreign subsidiary does not have an independent cost of capital. However, in order to estimate the discount rate for a comparable host-country firm, the analyst should try to calculate a hypothetica...

Q: What are the three major functions of the foreign exchange market?

What are the three major functions of the foreign exchange market?

Q: What is the J-Curve adjustment path?

What is the J-Curve adjustment path?

Q: How is the global foreign exchange market structured? Is digital telecommunications

How is the global foreign exchange market structured? Is digital telecommunications replacing people?

Q: For each of the foreign exchange market participants, identify their motive

For each of the foreign exchange market participants, identify their motive for buying or selling foreign exchange.

Q: Define each of the following types of foreign exchange transactions:

Define each of the following types of foreign exchange transactions: a. Spot b. Outright forward c. Forward-forward swaps

Q: Define and differentiate the different type of swap transactions in the foreign

Define and differentiate the different type of swap transactions in the foreign exchange markets.

Q: What is a nondeliverable forward and why does it exist?

What is a nondeliverable forward and why does it exist?

Q: With reference to foreign exchange turnover in 2013: a.

With reference to foreign exchange turnover in 2013: a. Rank by volume the relative size of spot, forwards, and swaps. b. List the five most important geographic locations for foreign exchange turnove...