Discussion: "Financing International Trade"
Please respond to the following:
• Compare two methods that a company can use in order to finance international trade. Examine the advantages and disadvantages of financing with a portfolio of currencies. Provide two examples of how companies or MNCs finance international transactions by using their own "bank" or by keeping currencies on hand (marketable securities).
• Analyze Interest Rate Parity (IRP) and two methods for forecasting exchange rates. Determine the primary manner in which they all affect a company's short-term financing decision. Support your response with one example of the manner in which IRP and forecasting exchange rates methods affect a company's short-term financing decision.