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    International Finance

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    Benefits of the International Capital Markets

    1. What are some benefits of the international capital markets? Does borrowing a portfolio of currencies offer any possible advantages over the borrowing of a single foreign currency? 2. Why would an organization consider investing short term funds overseas? What techniques are available to multinational firms to speed up the

    Foreign Corporate Tax Rate

    Suppose England raised its corporate tax rate by 1 percentage point from 40% to 41%. How would this increase affect the economics of a U.S.-U.K. foreign expansion project?

    Monetary policy helps to sustain economic growth

    PROBLEM: A question that arises in training is, "How does monetary policy help sustain growth and help the ups and downs of the business cycle?" Given the key role of monetary policy and knowing this question will continue to arise, you decide to add a section about this topic. Discuss how monetary policy helps to sustain e

    Money and Capital Markets

    You want to explain to a group of new hire bank employees the role the a Bank has as an institution in the financial market and the roles financial markets have in the economy. Create a slide presentation that presents the primary roles that financial institutions have in financial markets and the roles financial markets have in

    Dear Student, Thank you for using BM. Below are my answers. First, derivatives are financial instruments which offer returns based on the return of an underlying asset. Derivatives are usually undertaken to manage or hedge the risk exposures of a firm. Second, the Financial Accounting Standards Board or FASB's Statement of Financial Accounting Standards or SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, outlines the basic guidelines for the accounting of these instruments and they are as follows. Derivatives must be reported by companies in the balance sheet as either assets or liabilities and recorded at their fair value, and their classifications determined how the difference in the fair value and their book value at the statement date be reported in the financial statements. 1. Derivative designated as a hedging instrument for the exposure to changes in the fair value of the underlying. The difference between the fair and book values is recognized in the income statement adjusted for the gains or losses from the hedged item. 2. Derivative as a hedging instrument for the exposure to the variability of cash flows of a forecasted transaction. Differences in fair and book values of the derivative instrument are initially included as part of the other comprehensive income under the equity section of the balance sheet and then reclassified into the income statement when the underlying transactions have been executed. 3. Derivatives as a hedging instrument for the exposure to foreign currency exchange rate volatility for a net investment in a foreign operation. The difference between the book and fair values is also reported in other comprehensive income. 4. Derivatives not designated as a hedging instrument. Differences in fair and book values are accounted for in the income statement for the period.

    Please help with the following problem. A clothier makes coats and slacks. The two resources required are wool cloth and labor. The clothier has 150 square yards of wool and 200 hours of labor available. Each coat requires 3 square yards of wool and 10 hours of labor, whereas each pair of slacks requires 5 square yards of

    Risks: International Real Estate Industry

    Please provide a brief explanation of how the following international risk factors affect the United States REAL ESTATE INDUSTRY: 1. International political risk 2. Foreign exchange rate risk 3. Economic risk

    Hospital/healthcare mergers

    Hello BrainMass OTAs, I need help with two questions strictly related to healthcare/hospital mergers. 1. Evaluate this assertion: since 1997 there has been a steady decline in hospital mergers. A major reason for this decline has been the lack of anticipated cost savings from the mergers. 2. Also, if a health care merg

    Understanding strategic planning in a foreign country

    1) Why do global businesses fail even after strategic planning occurs? What tactical adjustments can you make to correct malfunctions (organizational, financial, marketing, ethical, political, legal, etc.) to avoid a total global business failure? 2) What is the relationship between country risk analysis and possible exit str

    INTERNATIONAL BUSINESS AND MANAGEMENT

    Having previously identified the location of its greenfield investment. ( The location I chose is CHINA) Acme, a multi-billion dollar public MNE that is incorporated in the U.S., must next obtain external financing for its proposed overseas production facility. It has been estimated that the acquisition will cost $500M an

    International Finance - Exchange rates

    1. The $/Euro exchange rate is Euro= $0.95, and the Euro/SFr exchange rate is SFr 1 = Euro 0.71. What is the SFr/$ exchange rate? 7. In 1995, one dollar bought ¥80. In 2000, it bought about ¥110. A. What was the dollar value of the yen in 1995? What was the yen's dollar value in 2000? B. By what percent h

    Retirement/ Risk Versus

    Given stocks, mutual funds, and/or bonds, what would be the best retirement plans? Why? What are some examples of when you make risk versus return decisions in everyday life?

    Research the export patterns of a principal competitor

    You have been asked to research the export patterns of a principal competitor, which include : Clorox (TM) , Colgate-Palmolive ( TM) , Dial Corporation (TM) , and Procter & Gamble (TM) . Locate the annual report ( and other information ) for one of these companies and prepare a memo ad

    Thai baht

    Did speculators play a role in the fall in the Thai baht? Did they cause it? What could the Thai government have done to prevent the financial crisis?

    Portfolio risk

    A. U.S. investor has a portfolio of French, German, Italian, and Dutch bonds. Is this portfolio less risky in U.S. dollar terms now that the euro is the common currency of Europe, since the portfolio is now only exposed to a single exchange rate rather than to four exchange rates for the franc, mark, lira, and guilder?

    FASB's conceptual framework-earnings

    According to the FASB's conceptual framework, earnings a. is the same as comprehensive income. b. excludes certain gains and losses that are included in comprehensive income. c. includes certain gains and losses that are excluded from comprehensive income. d. includes certain losses that are excluded from comprehensive inc

    Forward contract problem

    Suppose that your company will be receiving 30 million euros six months from now and the euro is currently selling for 1 euro per dollar. If you want to hedge the foreign exchange risk in this payment, what kind of forward contract would you want to enter into?

    Accounting problem

    Using the attached financials; develop a set of pro forma financials (income statement and balance sheet only) for the next fiscal year-end using the percent-of-sales method. Assume that the company's sales have increased by 20%. Be sure to list the underlying assumptions of your analysis and computations.

    Measure risk using standard deviation and coefficient of variation

    You work for an large investment firm and recently wrote a position article on your firm's approach to investing for the small investor, titled "Investing is for the little guy". The article now appears on your company's website. It has, interestingly enough, generated e-mailed responses from potential clients and your firm is a

    Bonds

    Briefly describe the types of risks faced by investors in domestic bonds? Also indicate the additonal risks associated with nondomestic bonds. Explain the differece between Stocks and Bonds and which one Corporations use most to raise capital.

    definitions of theories, Ms. Rosetta Stone, silk scarf importer

    1. Define each of the following theories in a sentence or simple equation: a. Interest-rate parity theory b. Expectations theory of forward rates c. Law of one price 2. Ms. Rosetta Stone, the treasurer of International Reprints, Inc., has noticed that the interest rate in Switzerland is below the rates in most other coun

    M&M-interest tax shield

    Within the M&M framework of corporate taxes but no personal taxes, determine the present value of the interest tax shield of Herculio Mining, as well as the total value of the firm. Herculio has net operating income of $5 million; there is $50 million of debt outstanding with a required rate of return of 6 percent; the required

    The Federal Reserve Bank and economics discussion questions

    The Federal Reserve Bank publishes a report called the Beige Book eight times a year that summarizes the current economic conditions in each of the 12 bank districts. 1. Report the recent conditions of consumer spending, labor markets, wages and prices, and industrial activity. 2. What is the most recent monetar

    Multinational subsidiary host balance of payments (BOP) deficit; what measures?

    1. You are the chief executive officer of a multinational's subsidiary in a developing host country. The subsidiary has been in business for about eight years, making electric motors for the host country's domestic market, with mediocre financial results. Before you left the home country a month ago, you were told to make the su

    Hedging translation exposures backfires and adoption of the Euro

    Hedging translation exposure with forward contracts can backfire if the currency being hedged depreciates. true. false. The euro is the currency: adopted in all western European countries as of 1999. adopted in all eastern European countries as of 1999. adopted in all European countries as of 1999.