Questions from Multinational Business Finance

Q: What was the basis of the Argentine Currency Board, and why

What was the basis of the Argentine Currency Board, and why did it fail, in 2002?

Q: What are the major differences between short-term and long-

What are the major differences between short-term and long-term forecasts for a fixed exchange rate versus a floating exchange rate?

Q: What is meant by the term “overshooting”? What causes it

What is meant by the term “overshooting”? What causes it and how is it corrected?

Q: The emerging market crises of 1997-2002 were worsened because of

The emerging market crises of 1997-2002 were worsened because of rampant speculation. Do speculators cause such crisis or do they simply respond to market signals of weakness? How can a government man...

Q: Explain the meaning of "cross-rate consistency" as used

Explain the meaning of "cross-rate consistency" as used by MNEs. How do MNEs use a check of cross-rate consistency in practice?

Q: Define stabilizing and destabilizing expectations, and describe how they play a

Define stabilizing and destabilizing expectations, and describe how they play a role in the long-term determination of exchange rates.

Q: The most widely accepted theory of foreign exchange rate determination is purchasing

The most widely accepted theory of foreign exchange rate determination is purchasing power parity, yet it has proven to quit poor at forecasting future spot exchange rates. Why?

Q: Many multinational firms use forecasting services regularly. If forecasting is essentially

Many multinational firms use forecasting services regularly. If forecasting is essentially ‘foretelling the future', and that is theoretically impossible, why would these firms spend money on these se...

Q: Statistics on a country's balance of payments are used by the business

Statistics on a country's balance of payments are used by the business press and business itself often in terms of predicting exchange rates, but the academic profession is highly critical of it. Why?...

Q: What are the largest contingent currency exposures which arise in the process

What are the largest contingent currency exposures which arise in the process of pursuing and executing a cross-border acquisition?