CP

Managers of multinational companies must deal with a wide range of issues that are not present when a company operates in a sing ...

5.To avoid political and regulatory hurdles.The primary reason Japanese auto companies moved production to the United States was ...

U.S. commercial and investment banks do not have as much freedom as foreign banks, which has led many U.S. banks to establish su ...

1.Different currency denominations.Cash flows in various parts of a multi- national corporate system will be denominated in diff ...

550 CHAPTER 15 Multinational Financial Management The Euro: What You Need to Know In January 1999, many Europeans began making p ...

Exchange Rates 551 We can use the data in Table 15-1 to show how to work with exchange rates. Sup- pose a tourist flies from New ...

552 CHAPTER 15 Multinational Financial Management Therefore, for every euro she would receive 1.4757 Swiss francs, so she would ...

The International Monetary System 553 Now notice, by reading down the euro column, that one euro was worth 1.4757 Swiss francs. ...

554 CHAPTER 15 Multinational Financial Management exports to Great Britain, there would be a greater demand for pounds than for ...

The International Monetary System 555 domestic employment. For example, if a country is having a problem with un- employment, it ...

Current currency futures prices are available directly from the Chicago Mercan- tile Exchange (CME) on their web site at http:// ...

Interest Rate Parity 557 divided by 125.54 yen per dollar) in 30 days. But if the spot rate falls to 100 yen per dol- lar, for e ...

558 CHAPTER 15 Multinational Financial Management return will be higher than the investment’s stated return if the currency in w ...

Purchasing Power Parity 559 After accounting for exchange rates, interest rate parity states that bonds in the home country and ...

560 CHAPTER 15 Multinational Financial Management Note that the spot market exchange rate is expressed as the number of units of ...

Inflation, Interest Rates, and Exchange Rates 561 Still, the concepts of interest rate and purchasing power parity are criticall ...

562 CHAPTER 15 Multinational Financial Management The currencies of countries with higher inflation rates than that of the Unite ...

International Money and Capital Markets 563 Eurodollar deposits are for $500,000 or more, and they have maturities ranging from ...

564 CHAPTER 15 Multinational Financial Management bond. Furthermore, because it is denominated in dollars and sold in the United ...

Multinational Capital Budgeting 565 United States, with most of them traded on the over-the-counter (OTC) market. However, more ...