Problem:
Choose a country (not the United States or Canada). Then, identify some political and currency risks of that country and discuss why a U.S. company would invest (for example, build a factory) in that country. Also discuss some of the various international finance topics such as the foreign exchange market, purchasing power parity, interest rate parity, cross rates, and so on.
Required:
Question 1: Why is it important for international firms to understand these concepts?
Note: Please show how you came up with the solution.