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Interpreting Exchange Rate Quotations 1. Interpreting Exchange Rate Quotations. Today you notice the following exchange rate quotations: *$1 is equal to 3.00 Argentine pesos *1 Argentine peso = 0.50 Canadian dollars You need to purchase 100,000 Canadian dollars with U.S. dollars. How many U.S. dollars will you need for your purchase? 2. Inflation Effects on Exchange Rates. Assume that the U.S. inflation rate becomes high relative to ...

Other / Other 23 Apr 2016

Explain how the theory of comparative advantage relates to the need for international business 1. Comparative Advantage. a. Explain how the theory of comparative advantage relates to the need for international business. b. Explain how the product cycle theory relates to the growth of an MNC. 2. Impact of Political Risk. Explain why political risk may discourage international business. Business Management Assignment Help, B ...

Other / Other 23 Apr 2016

Explain how the Wal-Mart outlets in China would use the spot market International Financial Markets. Recently, Wal-Mart established two retail outlets in the city of Shanzen, China, which has a population of 3.7 million. These outlets are massive and contain products purchased locally as well as imports. As Wal-Mart generates earnings beyond what it needs in Shanzen, it may remit those earnings back to the United States. Wal-Mart is like ...

Other / Other 23 Apr 2016

Drexel Co. is a U.S. based company that is establishing a project 1. Financing Decision. Drexel Co. is a U.S. based company that is establishing a project in a politically unstable country. It is considering two possible sources of financing. Either the parent could provide most of the financing, or the subsidiary could be supported by local loans from banks in that country. Which financing alternative is more appropriate to protect the s ...

Other / Other 23 Apr 2016

Which method would you recommend for this firm 1. Methods Used to Conduct International Business. Duve, Inc., desires to penetrate a foreign market with either a licensing agreement with a foreign firm or by acquiring a foreign firm. Explain the differences in potential risk and return between a licensing agreement with a foreign firm, and the acquisition of a foreign firm. 2. International Business Methods. Snyder Golf Co., a U.S. firm t ...

Other / Other 23 Apr 2016

Explain why other Latin American currencies could be affected 1. Currency Effects on Economy. What is the impact of a weak home currency on the home economy, other things being equal? What is the impact of a strong home currency on the home economy, other things being equal? 2. Effects of Indirect Intervention. Suppose that the government of Chile reduces one of its key interest rates. The values of several other Latin American currencies ...

Other / Other 23 Apr 2016

Income Effects on Exchange Rates 1. Interest Rate Effects on Exchange Rates. Assume U.S. interest rates fall relative to British interest rates. Other things being equal, how should this affect the (a) U.S. demand for British pounds, (b) supply of pounds for sale, and (c) equilibrium value of the pound? 2. Income Effects on Exchange Rates. Assume that the U.S. income level rises at a much higher rate than does the Canadian income level. O ...

Other / Other 23 Apr 2016

Factors Affecting Exchange Rates 1. Factors Affecting Exchange Rates. In the 1990s, Russia was attempting to import more goods but had little to offer other countries in terms of potential exports. In addition, Russia’s inflation rate was high. Explain the type of pressure that these factors placed on the Russian currency. 2. Factors Affecting Exchange Rates. If the Asian countries experience a decline in economic growth (and exper ...

Other / Other 23 Apr 2016

Benefits and Risks of International Business 1. Benefits and Risks of International Business. As an overall review of this chapter, identify possible reasons for growth in international business. Then, list the various disadvantages that may discourage international business. 2. Valuation of an MNC. Hudson Co., a U.S. firm, has a subsidiary in Mexico, where political risk has recently increased. Hudson’s best guess of its future pe ...

Other / Other 23 Apr 2016

How might this action have affected the foreign flow 1. Effects of September 11. Within a few days after the September 11, 2001 terrorist attack on the U.S., the Federal Reserve reduced short-term interest rates in the U.S. to stimulate the U.S. economy. How might this action have affected the foreign flow of funds into the U.S. and affected the value of the dollar? How could such an effect on the dollar increase the probability that the ...

Other / Other 23 Apr 2016