Questions from Multinational Business Finance


Q: What is the difference between the price of an option, the

What is the difference between the price of an option, the value of an option, the premium on an option, and the cost of a foreign currency option?

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Q: What are the three different prices or ‘rates' integral to every

What are the three different prices or ‘rates' integral to every foreign currency option contract?

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Q: What is an interest "reference rate" and how is it

What is an interest "reference rate" and how is it used to set rates for individual borrowers?

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Q: What would be the preferred strategy for a borrower paying interest on

What would be the preferred strategy for a borrower paying interest on a future date if they expected interest rates to rise?

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Q: How can a business firm that has borrowed on a floating-

How can a business firm that has borrowed on a floating-rate basis use a forward rate agreement to reduce interest rate risk?

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Q: What is a plain vanilla interest rate swap? Are swaps a

What is a plain vanilla interest rate swap? Are swaps a significant source of capital for multinational firms?

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Q: What are the primary driving forces that motivate cross-border mergers

What are the primary driving forces that motivate cross-border mergers and acquisitions?

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Q: If interest rate swaps are not the cost of government borrowing,

If interest rate swaps are not the cost of government borrowing, what credit quality do they represent?

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Q: Why do fixed for floating interest rate swaps never swap the credit

Why do fixed for floating interest rate swaps never swap the credit spread component on a floating rate loan?

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Q: How can interest rate swaps be used by a multinational firm to

How can interest rate swaps be used by a multinational firm to manage its debt structure?

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