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    FNCE3000 In-Class Assignment 1 Questions Chap 1madura Text

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    Ashish Kumar
    This document provides instructions and questions for an assignment on international finance. Students are to complete the assignment individually or in groups, writing their answers by hand. The assignment is worth 3% of the student's grade and is due at the beginning of class. It contains 9 questions about topics covered in the assigned chapter, including agency problems of multinational corporations, comparative advantage, imperfect markets, international opportunities, exchange rate movements, and centralization versus decentralization.

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    FNCE3000 In-Class Assignment 1 Questions Chap 1madura Text

    Uploaded by

    Ashish Kumar
    100 views4 pages
    This document provides instructions and questions for an assignment on international finance. Students are to complete the assignment individually or in groups, writing their answers by hand. The assignment is worth 3% of the student's grade and is due at the beginning of class. It contains 9 questions about topics covered in the assigned chapter, including agency problems of multinational corporations, comparative advantage, imperfect markets, international opportunities, exchange rate movements, and centralization versus decentralization.

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    International Business HW

    Original Title

    FNCE3000 in-class Assignment 1 Questions Chap 1Madura Text

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    This document provides instructions and questions for an assignment on international finance. Students are to complete the assignment individually or in groups, writing their answers by hand. The assignment is worth 3% of the student's grade and is due at the beginning of class. It contains 9 questions about topics covered in the assigned chapter, including agency problems of multinational corporations, comparative advantage, imperfect markets, international opportunities, exchange rate movements, and centralization versus decentralization.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    100 views4 pages

    FNCE3000 In-Class Assignment 1 Questions Chap 1madura Text

    Uploaded by

    Ashish Kumar
    This document provides instructions and questions for an assignment on international finance. Students are to complete the assignment individually or in groups, writing their answers by hand. The assignment is worth 3% of the student's grade and is due at the beginning of class. It contains 9 questions about topics covered in the assigned chapter, including agency problems of multinational corporations, comparative advantage, imperfect markets, international opportunities, exchange rate movements, and centralization versus decentralization.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    NAME:__________________

    FNCE-3000 International Finance


    Chapter 1 Questions
    INSTRUCTIONS AND POLICIES:

    This is a personal assignment. Answers can be worked on in groups


    Answers should be hand written (pen or pencil)
    Point form is allowable, if your ideas can be clearly presented this way.

    The answers to the questions can be found within the chapters being covered.

    SUBMITTING YOUR REPORT:

    Your report is due in class at the beginnig of the class. It must be neatly printed on the
    sheet provided.

    GRADING AND EVALUATION:

    This report is worth 3% of your final grade.

    Agency Problems of MNCs.


    a. Explain the agency problem of MNCs.

    b Why might agency costs be larger for an MNC than for a purely domestic firm?

    FNCE-3000 International Finance

    NAME:__________________

    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.

    Imperfect Markets.
    a. Explain how the existence of imperfect markets has led to the establishment of subsidiaries
    in foreign markets.

    b. If perfect markets existed, would wages, prices, and interest rates among countries be more
    similar or less similar than under conditions of imperfect markets? Why?

    4. International Opportunities.
    a

    Do you think the acquisition of a foreign firm or licensing will result in greater growth for
    an MNC? Which alternative is likely to have more risk?

    b. Describe a scenario in which the size of a corporation is not affected by access to


    international opportunities.

    FNCE-3000 International Finance

    NAME:__________________

    c. Explain why MNCs such as Coca Cola and PepsiCo, Inc., still have numerous opportunities
    for international expansion.

    5. International Opportunities Due to the Internet.


    a. What factors cause some firms to become more internationalized than others?

    b. Offer your opinion on why the Internet may result in more international business.

    6. Impact of Exchange Rate Movements. Plak Co. of Chicago has several European
    subsidiaries that remit earnings to it each year. Explain how appreciation of the euro (the
    currency used in many European countries) would affect Plak's valuation.

    FNCE-3000 International Finance

    NAME:__________________
    7. 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.

    8. 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 peso cash flows to be received has
    not changed. However, its valuation has declined as a result of the increase in political risk.
    Explain.

    9. Centralization and Agency Costs. Would the agency problem be more pronounced for
    Berkley Corp., which has its parent company make most major decisions for its foreign
    subsidiaries, or Oakland Corp., which uses a decentralized approach?

    FNCE-3000 International Finance

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