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What is the slope of an engel curve for perfect substitute and perfect complement goods if price of good x is less than price of good y?
Assume the time from acceptance to maturity on a $2,000,000 banker’s acceptance is 90 days. Further assume that the importing bank’s acceptance commission is 1.25 percent and that the mark
Do you think that a country’s government should assist private business in the conduct of international trade through direct loans, loan guarantees, and/or credit insurance?
Discuss the various ways the exporter can receive payment in a foreign trade transaction after the importer’s bank accepts the exporter’s time draft and it becomes a banker’s accepta
Discuss some of the reasons why international trade is more difficult and risky from the exporter’s perspective than is domestic trade.
Study the DaimlerChrysler saga and identify the main factors for the failure of this cross-border merger.
What operational and financial measures can a MNC take in order to minimize the political risk associated with a foreign investment project?
How would you explain the fact that China emerged as the second most important recipient of FDI after the United States in recent years?
Since the NAFTA was established, many Asian firms especially those from Japan and Korea made extensive investments in Mexico. Why do you think these Asian firms decided to build production facilities
Japanese MNCs, such as Toyota, Toshiba, Matsushita, etc., made extensive investments in the Southeast Asian countries like Thailand, Malaysia and Indonesia. In your opinion, what forces are driving Ja
Recently, many foreign firms from both developed and developing countries acquired high-tech U.S. firms. What might have motivated these firms to acquire U.S. firms?
Two years ago, Rone issued a $25 million (U.S.$), five-year floating rate note (FRN). The FRN pays an annual coupon equal to one-year LIBOR plus 75 basis points. The FRN is non-callable and will be re
A corporation enters into a five-year interest rate swap with a swap bank in which it agrees to pay the swap bank a fixed rate of 9.75 percent annually on a notional amount of €15,000,000 and rec
Determine the QSD and set up a floating-for-floating rate swap where the swap bank receives .125 percent and the two counterparties share the remaining savings equally.
Assume a currency swap in which two counterparties of comparable credit risk each borrow at the best rate available, yet the nominal rate of one counterparty is higher than the other
A U.S. company needs to raise €50,000,000. It plans to raise this money by issuing dollar denominated bonds and using a currency swap to convert the dollars to euros. The company expects interest
Suppose Morgan Guaranty, Ltd. is quoting swap rates as follows: 7.75 - 8.10 percent annually against six-month dollar LIBOR for dollars and 11.25 - 11.65 percent annually against six-month dollar
If the cost advantage of interest rate swaps would likely be arbitraged away in competitive markets, what other explanations exist to explain the rapid development of the interest rate swap market?
Explain “free cash flows.” Why do managers like to retain free cash flows instead of distributing it to shareholders? Discuss what mechanisms may be used to solve this problem?
Concept raised in the Dasgupta article in the terms of theoretical microeconomics. Do not try to solve the problem. Simply try to structure the optimization decision.
Many companies grant stocks or stock options to the managers. Discuss the benefits and possible costs of using this kind of incentive compensation scheme.
The Cadbury Code of the Best Practice adopted in the United Kingdom led to a successful reform of corporate governance in the country. Explain the key requirements of the Code and discuss how it may h
Studies show that the legal protection of shareholder rights varies a great deal acro+A66ss countries. Discuss the possible reasons why the English common law tradition provides the strongest and the
Following corporate scandals and failures in the U.S. and abroad, there is a growing demand for corporate governance reform. What should be the key objectives of corporate governance reform? What kind
The public corporation is owned by multitude of shareholders but managed by professional managers. Managers can take self-interested actions at the expense of shareholders. Discuss the conditions unde