QUESTION 1: Explain why a public forecast by a respected economist about future interest
rates could affect the value of the dollar today. Why do some
... [Show More] forecasts by well-respected
economists have no impact on today’s value of the dollar?
QUESTION 2: 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
QUESTION 3: Infrastructure weakness was one of the causes of the emerging market crisis in
Thailand in 1997. Define infrastructure weakness, and explain how it could affect a country’s
exchange rate
QUESTION 4: Assume that there are substantial capital flows among Canada, the U.S., and
Japan. If interest rates in Canada decline to a level below the U.S. interest rate, and inflationary
expectations remain unchanged, how could this affect the value of the Canadian dollar against
the U.S. dollar? How might this decline in Canada’s interest rates possibly affect the value of the
Canadian dollar against the Japanese yen?
QUESTION 5: 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.
QUESTION 6: Explain how the theory of comparative advantage relates to the need for
international business.
QUESTION 7: Offer your opinion on why the Internet may result in more international business.
QUESTION 8: Define (without graphics) how the optimal domestic portfolio is constructed
QUESTION 9: The benefits of portfolio construction, domestically or internationally, arise from
the lack of correlation among assets and markets. The increasing globalization of business is
expected to change these correlations over time. How do you believe they will change, and
why?
QUESTION 10: Briefly discuss how did the global financial crisis in 2007-2010 happened and
three of its consequences. [Show Less]