Exam. Finance Essay

Finance 415Exam IReview QuestionsSuggestions1) guide chapters 1 5 and review the PPTs we covered in class. 2) Expect 5 or 7 short-answer questionsGeneral Questions 1. In class we reviewed three unattackables in three different countries. The M/S Milad Nor Company in Afghanistan, Caritex in Bulgaria, and Obod in Montenegro. Each company was faced with different problems and issues. Please shortly summarize the similarities between the firms and their individual issues. How do the problems faced by these firms analyse to problems faced by similar firms in more developed countries? 2. Your filiation food market simulation calls for you to invest in securities with a significant battlefront outside the US debt, equity, commodities, currencies, derivatives In researching equities trading on changes outside of the US what similarities/differences halt you found compared to firms trading on exchanges in the US? Chapter 11.The term globalization has become very widely used in rec ent years. How would you define it? 2.What does an MNE need in order for it to create nurse through the globalization process? 3.How does the concept of capitalism actually obligate to the globalization process of a business, as it moves from elemental to multinational stages of festering? 4. Define and explain the theory of comparative advantage5. Key to mind most theories is what they say and they dont. Name four or flipper key limitations to theory of comparative advantage. 6.Why have Eurocurrencies and LIBOR rebrinyed the centerpiece of the global fiscal marketplace for so long? * These are domestic currencies of one rural on deposit in a second acres * The Eurocurrency markets dish two valuable purposes * Eurocurrency deposits are an efficient and convenient money market device for holding excess corpo ramble liquidity * The Eurocurrency market is a study source of short-termbank loans to finance corporate working(a) capital needs (including export and import financin g) * LIBOR is the most widely authoritative rate of interest used in standardized quotations, loan agreements, and fiscal derivatives transactions *7. Which assets play the most critical role in linking the major institutions that make up the global financial marketplace? * The linkages are the interbank networks exploitation currency. Without ready exchange of currencies the market is hard-pressed to operate efficiently.Chapter 21. How does willpower alter the goals and presidential term of a business? Public ownership may be wholly state-owned or partially publicly traded. State possess Enterprises (SOEs) are created for business purposes kind of than for regulation or civil activities. common soldier firms may be publicly traded ( transport) or privately owned by partners or family. 2.Why is this separation so critical to the understanding of how businesses are organize and led? 3.Explain the assumptions and objectives of the shareholder wealth maximization simulate. 4. Explain the assumptions and objectives of the stakeholder wealth maximization model. 5.Define the hobby termsa.Corporate politicsb.Agency theoryc.Stakeholder capitalism6.In Germany and Scandinavia, among other countries, labor meats have representation on get along withs of directors or supervisory boards. How might such union representation be viewed under the shareholder wealth maximization model compared to the corporate wealth maximization model? 7.In many countries it is common for a firm to have two or more classes of common stock with differential voting rights. In the United States the norm is for a firm to have one class of common stock with one-share-one-vote. What are the advantages and disadvantages of severally system? 8.What are the key differences in the goals and motivations of family ownership of the businessas opposed to the widely held publicly traded business? 9.It has been claimed that failures in corporate brass have hampered the growth and profitability of some prominent firms located in emerging markets. What are some of the typical causes of these failures in corporate governance?p34 10. Do markets appear to be willing to pay for good governance?p36 Chapter 31.Under the gold standard all national establishments promised to follow the rules of the game. This meant support a fixed exchange rate. What did this promise imply about a countrys money supply? 2.If a country follows a fixed exchange rate regime, what macroeconomic variables could cause the fixed exchange rate to be devalued? 3.What are the advantages and disadvantages of fixed exchange order? 4.Explain what is meant by the term impossible trinity and why it is true. 5.Fixed exchange rate regimes are sometimes implemented through a currency board (Hong Kong) or dollarization (Ecuador). What is the difference between the two approaches? 6.High capital mobility is forcing emerging market nations to choose between free-floating regimes and currency board or dollarization r egimes. What are the main outcomes of each of these regimes from the perspective of emerging market nations? 7.On January 4, 1999, eleven member states of the European Union initiated the European Monetary Union (EMU) and established a hotshot currency, the euro, which replaced the individual currencies of participating member states. Describe three of the main shipway that the euro affects the members of the EMU. 8.Why did the fixed exchange rate regime of 19451973 eventually fail? 9.How did the Argentinian currency board function from 1991 to January 2002 and why did it collapse? DEADChapter 41. Business managers and investors need make out data to anticipate changes in innkeeper country economic policies that might be driven by BOP events.2. From the perspective of business managers and investors list three specific signals that a countrys BOP data can provide.3. What are the two main types of economic activity measured by acountrys BOP?4. Why does the BOP always balance?5. If the BOP were viewed as an accounting statement, would it be a balance sheet of the countrys wealth, an income statement of the countrys earnings, or a funds head for the hills statement of money into and out of the country?6. What are the main part accounts of the current account? Give one debit and one reference book example for each component account for the United States. adjust7. The US dollar has maintained or increased its value over the ult 20 years despite running a gradually change magnitude current account deficit. Why has this phenomenon occurred?Chapter 51. What were the three major forces rat the credit crisis of 2007 and 2008?2. Why were LIBOR order so much higher than hoarded wealth yields in 2007 and 2008? What is needed to return LIBOR rates to the lower, more stable rates of the past?3. What were the three key elements of the package used by the U.S. government to resolve the 2008-9 credit crisis?4. Why are the sovereign debtors of the Eurozone considere d to have a problem that is different from any other heavily indebted country, ilk the United States?5. Why has the case of Portugal been termed a case of contagion rather than a sovereign debt crisis?6. What are the three primary methods which might be used individually or in combination to resolve the European debt crisis?