Questions from Multinational Business Finance


Q: Which of the three major theoretical approaches seems to put the most

Which of the three major theoretical approaches seems to put the most weight into arguments on the supply and demand for currency? What is its primary weakness?

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Q: Explain how the asset market approach can be used to forecast future

Explain how the asset market approach can be used to forecast future spot exchange rates. How does the asset market approach differ from the BOP approach to forecasting?

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Q: Explain how technical analysis can be used to forecast future spot exchange

Explain how technical analysis can be used to forecast future spot exchange rates. How does technical analysis differ from the BOP and asset market approaches to forecasting?

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Q: What is foreign currency intervention? How is it accomplished?

What is foreign currency intervention? How is it accomplished?

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Q: Why do governments and central banks intervene in the foreign exchange markets

Why do governments and central banks intervene in the foreign exchange markets? If markets are efficient, why not let them determine the value of a currency?

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Q: When is direct intervention likely to be the most successful? And

When is direct intervention likely to be the most successful? And when is it likely to be the least successful?

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Q: Define the three types of foreign exchange exposure.

Define the three types of foreign exchange exposure.

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Q: Diagram the life span of an exposure arising from selling a product

Diagram the life span of an exposure arising from selling a product on open account. On the diagram define and show quotation, backlog, and billing exposures.

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Q: Which contract is more likely not to be performed, a payment

Which contract is more likely not to be performed, a payment due from a customer in foreign currency (a currency exposure), or a forward contract with a bank to exchange the foreign currency for the f...

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Q: Why do foreign currency cash balances not cause transaction exposure?

Why do foreign currency cash balances not cause transaction exposure?

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