国际财务管理课后习题答案

©2012byMcGraw-HillEducation.Thisisproprietarymaterialsolelyforauthorizedinstructoruse.Notauthorizedforsaleordistributioninanymanner.Thisdocumentmaynotbecopied,scanned,duplicated,forwarded,distributed,orpostedonawebsite,inwholeorpart.CHAPTER1GLOBALIZATIONANDTHEMULTINATIONALFIRMANSWERS&SOLUTIONSTOEND-OF-CHAPTERQUESTIONSANDPROBLEMSQUESTIONS1.Whyisitimportanttostudyinternationalfinancialmanagement?Answer:Wearenowlivinginaworldwhereallthemajoreconomicfunctions,i.e.,consumption,production,andinvestment,arehighlyglobalized.Itisthusessentialforfinancialmanagerstofullyunderstandvitalinternationaldimensionsoffinancialmanagement.Thisglobalshiftisinmarkedcontrasttoasituationthatexistedwhentheauthorsofthisbookwerelearningfinancesometwentyyearsago.Atthattime,mostprofessorscustomarily(andsafely,tosomeextent)ignoredinternationalaspectsoffinance.Thismodeofoperationhasbecomeuntenablesincethen.2.Howisinternationalfinancialmanagementdifferentfromdomesticfinancialmanagement?Answer:Therearethreemajordimensionsthatsetapartinternationalfinancefromdomesticfinance.Theyare:1.foreignexchangeandpoliticalrisks,2.marketimperfections,and3.expandedopportunityset.3.Discussthemajortrendsthathaveprevailedininternationalbusinessduringthelasttwodecades.Answer:The1990sbroughtarapidintegrationofinternationalcapitalandfinancialmarkets.Impetusforglobalizedfinancialmarketsinitiallycamefromthegovernmentsofmajorcountriesthathadbeguntoderegulatetheirforeignexchangeandcapitalmarkets.Theeconomicintegrationandglobalizationthatbeganintheeightiesispickingupspeedinthe1990sviaprivatization.Privatizationistheprocessbywhichacountrydivestsitselfoftheownershipandoperationofabusinessventurebyturningitovertothefreemarketsystem.Tradeliberalizationandeconomicintegrationcontinuedtoproceedatboththeregionalandgloballevels.InEurope,©2012byMcGraw-HillEducation.Thisisproprietarymaterialsolelyforauthorizedinstructoruse.Notauthorizedforsaleordistributioninanymanner.Thisdocumentmaynotbecopied,scanned,duplicated,forwarded,distributed,orpostedonawebsite,inwholeorpart.manyEUmembercountrieshaveadoptedthecommoncurrency,euro,thathasbecomethesecondglobalcurrencyaftertheU.S.dollar.4.Howisacountry’seconomicwell-beingenhancedthroughfreeinternationaltradeingoodsandservices?Answer:AccordingtoDavidRicardo,withfreeinternationaltrade,itismutuallybeneficialfortwocountriestoeachspecializeintheproductionofthegoodsthatitcanproducerelativelymostefficientlyandthentradethosegoods.Bydoingso,thetwocountriescanincreasetheircombinedproduction,whichallowsbothcountriestoconsumemoreofbothgoods.Thisargumentremainsvalidevenifacountrycanproducebothgoodsmoreefficientlythantheothercountry.Internationaltradeisnota‘zero-sum’gameinwhichonecountrybenefitsattheexpenseofanothercountry.Rather,internationaltradecouldbean‘increasing-sum’gameatwhichallplayersbecomewinners.5.Whatconsiderationsmightlimittheextenttowhichthetheoryofcomparativeadvantageisrealistic?Answer:ThetheoryofcomparativeadvantagewasoriginallyadvancedbythenineteenthcenturyeconomistDavidRicardoasanexplanationforwhynationstradewithoneanother.Thetheoryclaimsthateconomicwell-beingisenhancedifeachcountry’scitizensproducewhattheyhaveacomparativeadvantageinproducingrelativetothecitizensofothercountries,andthentradeproducts.Underlyingthetheoryaretheassumptionsoffreetradebetweennationsandthatthefactorsofproduction(land,buildings,labor,technology,andcapital)arerelativelyimmobile.Totheextentthattheseassumptionsdonothold,thetheoryofcomparativeadvantagemaylnotrealisticallydescribeinternationaltrade.6.Whataremultinationalcorporations(MNCs)andwhateconomicrolesdotheyplay?Answer:Amultinationalcorporation(MNC)canbedefinedasabusinessfirmincorporatedinonecountrythathasproductionandsalesoperationsinseveralothercountries.Indeed,someMNCshaveoperationsindozensofdifferentcountries.MNCsobtainfinancingfrommajormoneycentersaroundtheworldinmanydifferentcurrenciestofinancetheiroperations.Globaloperationsforcethetreasurer’sofficetoestablishinternationalbankingrelationships,toplace©2012byMcGraw-HillEducation.Thisisproprietarymaterialsolelyforauthorizedinstructoruse.Notauthorizedforsaleordistributioninanymanner.Thisdocumentmaynotbecopied,scanned,duplicated,forwarded,distributed,orpostedonawebsite,inwholeorpart.short-termfundsinseveralcurrencydenominations,andtoeffectivelymanageforeignexchangerisk.7.RossPerot,aformerPresidentialcandidateoftheReformParty,whichisathirdpoliticalpartyintheUnitedStates,hadstronglyobjectedtothecreationoftheNorthAmericanTradeAgreement(NAFTA),whichnonethelesswasinauguratedin1994.PerotfearedthelossofAmericanjobstoMexicowhereitismuchcheapertohireworkers.WhatarethemeritsanddemeritsofPerot’spositiononNAFTA?ConsideringtherecenteconomicdevelopmentsinNorthAmerica,howwouldyouassessPerot’spositiononNAFTA?Answer:SincetheinceptionofNAFTA,manyAmericancompaniesindeedhaveinvestedheavilyinMexico,sometimesrelocatingproductionfromtheUnitedStatestoMexico.AlthoughthismighthavetemporarilycausedunemploymentofsomeAmericanworkers,theywereeventuallyrehiredbyotherindustriesoftenforhig