国际资本运作英文原版chapter1 习题

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投资学第八版英文答案 CHAPTER 1 THE INVESTMENT ENVIRONMENT

CHAPTER 1: THE INVESTMENT ENVIRONMENTPROBLEM SETS1. Ultimately, it is true that real assets determine the material well being of an economy. Nevertheless, individuals can benefit when financial engineering creates new products that allow them to manage their portfoliosof financial assets more efficiently. Because bundling and unbundlingcreates financial products with new properties and sensitivities to various sources of risk, it allows investors to hedge particular sources of riskmore efficiently.2. Securitization requires access to a large number of potential investors. To attract these investors, the capital market needs:a safe system of business laws and low probability of confiscatorytaxation/regulation;a well-developed investment banking industry;a well-developed system of brokerage and financial transactions, and;well-developed media, particularly financial reporting.These characteristics are found in (indeed make for) a well-developedfinancial market.3. Securitization leads to disintermediation; that is, securitization provides a means for market participants to bypass intermediaries. For example, mortgage-backed securities channel funds to the housing market without requiring that banks or thrift institutions make loans from theirown portfolios. As securitization progresses, financial intermediariesmust increase other activities such as providing short-term liquidity to consumers and small business, and financial services.4. Financial assets make it easy for large firms to raise the capital needed to finance their investments in real assets. If General Motors, for example, could not issue stocks or bonds to the general public, it wouldhave a far more difficult time raising capital. Contraction of the supplyof financial assets would make financing more difficult, thereby increasingthe cost of capital. A higher cost of capital results in less investment and lower real growth.5. Even if the firm does not need to issue stock in any particular year, the stock market is still important to the financial manager. The stock price provides important information about how the market values the firm's investment projects. For example, if the stock price rises considerably, managers might conclude that the market believes the firm's futureprospects are bright. This might be a useful signal to the firm to proceed with an investment such as an expansion of the firm's business.In addition, the fact that shares can be traded in the secondary market makes the shares more attractive to investors since investors know that, when they wish to, they will be able to sell their shares. This in turn makes investors more willing to buy shares in a primary offering, and thus improves the terms on which firms can raise money in the equity market.6. a. Cash is a financial asset because it is the liability of the federal government.b. No. The cash does not directly add to the productive capacity of the economy.c. Yes.d. Society as a whole is worse off, since taxpayers, as a group will make up for the liability.7. a. The bank loan is a financial liability for Lanni. (Lanni's IOU is the bank's financial asset.) The cash Lanni receives is a financial asset. The new financial asset created is Lanni's promissory note (that is, Lanni’s IOU to the bank).b. Lanni transfers financial assets (cash) to the software developers.In return, Lanni gets a real asset, the completed software. No financial assets are created or destroyed; cash is simply transferred from one partyto another.c. Lanni gives the real asset (the software) to Microsoft in exchangefor a financial asset, 1,500 shares of Microsoft stock. If Microsoftissues new shares in order to pay Lanni, then this would represent the creation of new financial assets.d. Lanni exchanges one financial asset (1,500 shares of stock) for another ($120,000). Lanni gives a financial asset ($50,000 cash) to the bank and gets back another financial asset (its IOU). The loan is "destroyed" in the transaction, since it is retired when paid off and no longer exists.8. a.Assets Liabilities & Shareholders’ equityCash $ 70,000 Bank loan $ 50,000Computers 30,000 Shareholders’equity50,000Total $100,000 Total $100,000 Ratio of real assets to total assets = $30,000/$100,000 = 0.30b.Assets Liabilities & Shareholders’ equitySoftwareproduct*$ 70,000 Bank loan $ 50,000 Computers 30,000 Shareholders’equity50,000Total $100,000 Total $100,000 *Valued at costRatio of real assets to total assets = $100,000/$100,000 = 1.0 c.Assets Liabilities & Shareholders’ equityMicrosoft shares $120,000 Bank loan $ 50,000Computers 30,000 Shareholders’equity100,000Total $150,000 Total $150,000Ratio of real assets to total assets = $30,000/$150,000 = 0.20 Conclusion: when the firm starts up and raises working capital, it is characterized by a low ratio of real assets to total assets. When it is in full production, it has a high ratio of real assets to total assets. Whenthe project "shuts down" and the firm sells it off for cash, financial assets once again replace real assets.9. For commercial banks, the ratio is: $107.5/$10,410.9 = 0.010For non-financial firms, the ratio is: $13,295/$25,164 = 0.528The difference should be expected primarily because the bulk of the business of financial institutions is to make loans; which are financial assets for financial institutions.10. a. Primary-market transactionb. Derivative assetsc. Investors who wish to hold gold without the complication and cost of physical storage.11. a. A fixed salary means that compensation is (at least in the short run) independent of the firm's success. This salary structure does not tie the manager’s immediate compensation to the success of the firm. However, the manager might view this as the safest compensation structure and therefore value it more highly.b. A salary that is paid in the form of stock in the firm means that the manager earns the most when the shareholders’ wealth is maximized. This structure is therefore most likely to align the interests of managers and shareholders. If stock compensation is overdone, however, the manager might view it as overly risky since the manager’s career is already linked to the firm, and this undiversified exposure would be exacerbated with a large stock position in the firm.c. Call options on shares of the firm create great incentives for managers to contribute to the firm’s success. In some cases, however, stock options can lead to other agency problems. For example, a manager with numerous call options might be tempted to take on a very risky investment project, reasoning that if the project succeeds the payoff will be huge, while if it fails, the losses are limited to the lost value of the options. Shareholders, in contrast, bear the losses as well as the gains on the project, and might be less willing to assume that risk.12. Even if an individual shareholder could monitor and improve managers’ performance, and thereby increase the value of the firm, the payoff would be small, since the ownership share in a large corporation would be very small. For example, if you own $10,000 of GM stock and can increase the value of the firm by 5%, a very ambitious goal, you benefit by only: 0.05 $10,000 = $500In contrast, a bank that has a multimillion-dollar loan outstanding to the firm has a big stake in making sure that the firm can repay the loan. Itis clearly worthwhile for the bank to spend considerable resources to monitor the firm.13. Mutual funds accept funds from small investors and invest, on behalf of these investors, in the national and international securities markets. Pension funds accept funds and then invest, on behalf of current and future retirees, thereby channeling funds from one sector of the economy to another.Venture capital firms pool the funds of private investors and invest in start-up firms.Banks accept deposits from customers and loan those funds to businesses, or use the funds to buy securities of large corporations.14. Treasury bills serve a purpose for investors who prefer a low-risk investment. The lower average rate of return compared to stocks is the price investors pay for predictability of investment performance and portfolio value.15. With a “top-down” investing style, you focus on asset allocation or the broad composition of the entire portfolio, which is the major determinant of overall performance. Moreover, top-down management is the natural way to establish a portfolio with a level of risk consistent with your risk tolerance. The disadvantage of an exclusive emphasis on top-down issues is that you may forfeit the potential high returns that could result from identifying and concentrating in undervalued securities or sectors of the market.With a “bottom-up” investing style, you try to benefit from identifying undervalued securities. The disadvantage is that you tend to overlook theoverall composition of your portfolio, which may result in a non-diversified portfolio or a portfolio with a risk level inconsistent withyour level of risk tolerance. In addition, this technique tends to require more active management, thus generating more transaction costs. Finally, your analysis may be incorrect, in which case you will have fruitlessly expended effort and money attempting to beat a simple buy-and-hold strategy.16. You should be skeptical. If the author actually knows how to achieve such returns, one must question why the author would then be so ready tosell the secret to others. Financial markets are very competitive; one of the implications of this fact is that riches do not come easily. High expected returns require bearing some risk, and obvious bargains are fewand far between. Odds are that the only one getting rich from the book isits author.17. a. The SEC website defines the difference between saving and investing in terms of the investment alternatives or the financial assetsthe individual chooses to acquire. According to the SEC website, saving is the process of acquiring a “safe” financial asset and investing is the process of acquiring “risky” financial assets.b. The economist’s definition of savings is the difference between income and consumption. Investing is the process of allocating one’s savings among available assets, both real assets and financial assets. The SEC definitions actually represent (according the economist’s definition) two kinds of investment alternatives.18. As is the case for the SEC definitions (see Problem 17), the SIA defines saving and investing as acquisition of alternative kinds offinancial assets. According to the SIA, saving is the process of acquiring safe assets, generally from a bank, while investing is the acquisition of other financial assets, such as stocks and bonds. On the other hand, the definitions in the chapter indicate that saving means spending less than one’s income. Investing is the process of allocating one’s savings among financial assets, including savings account deposits and money market accounts (“saving” according to the SIA), other financial assets such a s stocks and bonds (“investing” according to the SIA), as well as real assets.。

国际金融英文版习题Chapter（精华版）

INTERNATIONAL FINANCEAssignment Problems (3) Name: Student#:I. Choose the correct answer for the following questions (only ONE correct answer) (2 credits for each question, total credits 2 x 25 = 50)1. Interbank quotations that include the United States dollars are conventionally given in, which state the foreign currency price of one U.S. dollar, such as a bid price of SFr 0.85/$.A. indirect quoteB. direct quoteC. American quoteD. European quote2. The spot exchange rate published in financial newspapers is usually the .A. nominal exchange rateB. real exchange rateC. effective exchange rateD. equilibrium exchange rate3. The foreign exchange refers to the .A. foreign bank notes and coinsB. demand deposits in foreign banksC. foreign securities that can be easily cashedD. all of the above4. The functions of the foreign exchange market come down to .A. converting the currency of one country into the currency of anotherB. providing some insurance against the foreign exchange riskC. making the foreign exchange speculation easyD. Only A and B are true.5. Which of the following is NOT true regarding the foreign exchange market.A. It is the place through which people exchange one currency for another.B. The exchange rate nowadays is mainly determined by the market forces.C. Most foreign exchange transactions are physically completed in this market.D. All of the above are true.6. The world largest foreign exchange markets are respectively.A. London, New York and TokyoB. London, Paris and FrankfurtC. London, Hong Kong and SingaporeD. London, Zurich and Bahrain7. The foreign exchange market is NOT efficient because .A. monetary authorities dominate the foreign exchange market and everybody knows that by definition, central banks are inefficientB. commercial banks and other participants of the market do not compete with one another due to the fact that transaction takes place around the world and not in a single centralized locationC. foreign exchange dealers have different prices such as bid and ask pricesD. None of the reasons listed are correct because the foreign exchange market is an efficient market8. earn a profit by a bid-ask spread on currencies they buy and sell.on the other hand, earn a profit by bringing together buyers and sellers of foreign exchanges and earning a commission on each sale and purchase.A. Foreign exchange brokers; foreign exchange dealersB. Foreign exchange dealers; foreign exchange brokersC. arbitragers; speculatorsD. commercial banks; central banks9. Most foreign exchange transactions are through the U.S. dollars. If the transaction is expressed as the currencies per dollar, this is known as whereas are expressed as dollars per currency.A. direct quote; indirect quoteB. indirect quote; direct quoteC. European quote; American quoteD. American quote, European quote10. From the viewpoint of a Japanese investor, which of the following would be a direct quote..B. .C. ￥110/.D. . ￥11. Which of the following is true about the foreign exchange market.A. It is a global network of banks, brokers, and foreign exchange dealers connected by electronic communications system.B. The foreign exchange market is usually located in a particular place.C. The foreign exchangerates are usually determined by the related monetary authorities.D. The main participants in this market are currency speculatorsfrom different countries.12. The extent to which the income from individual transactions is affected by fluctuations in foreign exchange values is considered to be .A. Translation exposureB. economic exposureC. transaction exposureD. accounting exposure13. Which of the following exchange rates is adjusted for price changes.A. nominal exchange rateB. real exchange rateC. effective exchange rateD. equilibrium exchange rate14. Suppose the exchange rate of the RMB versus U.S. dollar is ￥6.8523/$ n RMB were to undergo a 10% depreciation, the new exchange rate in terms ofbe:A. B. C. D.15. At least in a U.S. MNC’s financial accounting statement, if the value of the euro depreciatesrapidly againstthat of the dollar over a year, this would reducethe dollarvalue of the euro profit made by the European subsidiary. This is a typical .A. transaction exposureB. translation exposureC. economic exposureD. operating exposure16. A Japanese-based firm expects to receive pound-payment in 6 months. The companyhas a (an) .A. economic exposureB. accounting exposureC. long position in sterlingD. short position in sterling17 The exposure to foreign exchangerisk known as Translation Exposure may bedefined as .A. change in reported owne’r s equity in consolidated financial statements caused bya change in exchange ratesB. the impact of settling outstanding obligations entered into before change in exchange rates but to be settled after change in exchange ratesC. the changein expectedfuture cashflows arisingfrom an unexpectedchangein exchange ratesD. All of the above18 When a firm deals with foreign trade or investment, it usually has foreignexchange risk exposure. So if an American firm expects to receive a dollar-payment from a Chinese company in the next 30 days, the U.S. firm has the possible .A. economic exposureB. transaction exposureC. translation exposureD. none of the above19. In order to avoid the possible loss because of the exchange rate fluctuations, a firm that has a position in foreign exchanges can that position in the forward market.A. short; sellB. long; sellC. long; buyD. none of the above20. A forward contract to deliver Japaneseyens for Swissfrancs could be describedeither as or ,A. selling yens forward; buying francs forwardB. buying francs forward; buying yens forwardC. selling yens forward; selling francs forwardD. selling francs forward; buying yens forwardSFr/$21. Dollars are trading at S0=SFr0.7465/$ in the spot market. The 90-dayforwardSFr/$rate is F1=SFr0.7432/$. So the forward on the dollar in basis points is :A. discount,B. discount, 33C. premium,D. premium, 3322. If the spot rate is /. , 3-month forward rate is6./, which of the following is NOT true.A. euro is at forward premium by 100 points.B. dollar is at forward discount by 100 points.C. dollar is at forward discount by 55 points.D. euro is at forward premium by 2.96% p.a.23. If the spot C$/$ rate is 1.0305/15, forward dollar is 25/30 premium, the outright forward quote in American term should be .A. –B. –C. ––24. If the spot C$/$ rate is 1.0305/15, forward dollar is 25/30 premium, the $/C$ forward quote in terms of points should be .A. 30/25B. 25/30C. –(23/28)D. –(28/23)25. The current U.S. dollar exchange rate is￥85/$. If the 90-day forward dollar rate is ￥90/$, then the yen is selling at a per annum of .A. premium; 5.88%B. discount; 5.56%C. premium; 23.52%D. discount; 22.23%II. ProblemsQuestions1through10are based on the information presented in Table 3.1(2.credits for each question, total credits 2 x 10 = 20)TableCountry Exchange rate(2021) Exchange rate CPI Volume of Volume ofimports from U.S.(2021) (2021)Germany Mexico U.S.. 0.75/$Mex$11.8/$. 0.70/$Mex$12.20/$$200m$120m$350m$240m1. The real exchange rate of the dollar against the euro in 2021 was .2. The real exchange rate of the dollar against the peso in 2021 was .3. The dollar was against the euro in nominal term by .A. appreciated; 6.67%B. depreciated; 6.67%C. appreciated; 7.14%D depreciated; 7.14%4. The Mexican peso was against the dollar in nominal term by.A. appreciated; 3.39%B. depreciated; 3.39%C. appreciated; 3.28%D. depreciated; 3.28%5. The volume of the German foreign trade with the U.S. was .6. The volume of the Mexican foreign trade with the U.S. was .7. Assume the U.S. trades only with the Germany and Mexico. Now if we want to calculate the dollar effective exchange rate in 2021 against a basket of currencies of euroand Mexican peso, the weight assigned to the euro should be .8. The weight assigned to the peso should be .9. Assumethe 2021 is the baseyear. The dollar effective exchangerate in 2021 was.10. Was the dollar generally stronger or weaker in 2021 according to your calculation.11. The following exchange rates are available to you.Fuji Bank ￥80.00/$United Bank of Switzerland SFr0.8900/$Deutsche Bank ￥Assume you have an initial SFr10 million. Can you make a profit via triangular arbitrage. If so, show steps and calculate the amount of profit in Swiss fra n8cs c.r e(dit s)12. If the dollar appreciates 1000% against the ruble, by what percentage does the ruble depreciate against the dolla(r5. credits)13. As a percentage of an arbitrary starting amount, about how large would transactions costs have to be to make arbitrage between the exchange rat e S s Fr/$S= SFr1.7223/$, S$/￥￥/SFr= ￥, and S = ￥unprofitable. Explain(.7 credits14. You are given the following exchange rates:￥/A$S = 67.05 –￡/A$S –￥/ ￡Calculate the bid and ask rate of S : (5 credits)15.Suppose the spot quotation on the Swiss franc (CHF) in New York is4–42–68. Compute the percentage bid-ask spreads on the CHF/EUR quo t(e5. credits)Answers to Assignment Problems (3)Part I1. D2. A3. D4. D5. D6. A7. D8. B9. C 10. C11. A 12. A 13. B 14. D 15. B16. C 17. A 18. D 19. B 20. A21. B 22. B 23. C 24. C 25. D Part II1. 0.70 x (105.3/102.5) = 0.7 x 1.0273 =2. 12.2 x (105.3/110.5) = 12.2 x .9529 =3. B (0.7 /.75)–1 = -6.67%4. D (1/12.2)/(1/11.8) –1 = -3.28%5. 5506. 3607. 550/910 = 60.44%8. 360/910 =9. (0.70/0.75)(60.44%) + (12.2/11.8)(39.56%) = .5641 + 0.4090 = .9731 = 97.31%10. weaker, because dollar depreciated by 2.69%.￥/$ $/SFr SFr/ ￥11. Since S S S = 0.946186< 1, there is an arbitrage opportunity.Steps: ①Buy ￥from Deutsche Bank, SFr10 million x =￥950million② m③ mProfit (ignoring transaction fees):–SFr10 = 0.56875 million = 568,75012. (x–1) = 1000%; 1/11 –1 = 90.9%13. S SFr/$ S$/ ￥S￥/SFr = SFr1.7223/$ x x￥￥F=rIf transaction costs exceed $0.0326 (3.26%), the arbitrage is unprofitable.￥/A$14. Given: S = –￡/A$S –￥/.(bid)￡/.(ask)15. Given: –52/SFr–68/SFrSo, S SRr/ . (bid)S SFr/ . (ask)Bid-ask margin = –1.424) / 1.4264 = 0.1683%。

克鲁格曼《国际经济学》（国际金融部分）课后习题答案（英文版）第一章

克鲁格曼《国际经济学》（国际金融部分）课后习题答案（英文版）第一章CHAPTER 1INTRODUCTIONChapter OrganizationWhat is International Economics About?The Gains from TradeThe Pattern of TradeProtectionismThe Balance of PaymentsExchange-Rate DeterminationInternational Policy CoordinationThe International Capital MarketInternational Economics: Trade and MoneyCHAPTER OVERVIEWThe intent of this chapter is to provide both an overview of the subject matter of international economics and to provide a guide to the organization of the text. It is relatively easy for an instructor to motivate the study of international trade and finance. The front pages of newspapers, the covers of magazines, and the lead reports of television news broadcasts herald the interdependence of the U.S. economy with the rest of the world. This interdependence may also be recognized by students through their purchases of imports of all sorts of goods, their personal observations of the effects of dislocations due to international competition, and their experience through travel abroad.The study of the theory of international economics generates an understanding of many key events that shape our domesticand international environment. In recent history, these events include the causes and consequences of the large current account deficits of the United States; the dramatic appreciation of the dollar during the first half of the 1980s followed by its rapid depreciation in the second half of the 1980s; the Latin American debt crisis of the 1980s and the Mexico crisis in late 1994; and the increased pressures for industry protection against foreign competition broadly voiced in the late 1980s and more vocally espoused in the first half of the 1990s. Most recently, the financial crisis that began in East Asia in 1997 andspread to many countries around the globe and the Economic and Monetary Union in Europe have highlighted the way in which various national economies are linked and how important it is for us to understand these connections. At the same time, protests at global economic meetings have highlighted opposition to globalization. The text material will enable students to understand the economic context in which such events occur.Chapter 1 of the text presents data demonstrating the growth in trade and increasing importance of international economics. This chapter also highlights and briefly discusses seven themes which arise throughout the book. These themes include: 1) the gains from trade;2) the pattern of trade; 3) protectionism; 4), the balance of payments; 5) exchange rate determination; 6) international policy coordination; and 7) the international capital market. Students will recognize that many of the central policy debates occurring today come under the rubric of one of these themes. Indeed, it is often a fruitful heuristic to use current events to illustrate the force of the key themes and arguments which are presentedthroughout the text.。

国际经济学英文版（第八版）章节练习第一章

国际经济学英⽂版（第⼋版）章节练习第⼀章International Economics, 8e (Krugman)Chapter 1 Introduction1.1 What Is International Economics About?1) Historians of economic thought often describe ________ written by ________ and published in ________ as the first real exposition of an economic model.A) ”Of the Balance of Trade,” David Hume, 1776B) ”Wealth of Nations,” David Hume, 1758C) ”Wealth of Nations,” Adam Smith, 1758D) ”Wealth of Nations,” Adam Smith, 1776E) ”Of the Balance of Trade,” David Hume, 1758Answer: E2) 2)Ancient theories of international economics from the 18th and 19th Centuries areA) not relevant to current policy analysis.B) are only of moderate relevance in today’s modern international economy.C) are highly relevant in today’s modern international economy.D) are the only theories that actually relevant to modern international economy.E) are not well understood by modern mathematically oriented theorists.Answer: C3) An important insight of international trade theory is that when countries exchange goods and services one with the other itA) is always beneficial to both countries.B) is usually beneficial to both countries.C) is typically beneficial only to the low wage trade partner country.D) is typically harmful to the technologically lagging country.E) tends to create unemployment in both countries.Answer: B4) If there are large disparities in wage levels between countries, thenA) trade is likely to be harmful to both countries.B) trade is likely to be harmful to the country with the high wages.C) trade is likely to be harmful to the country with the low wages.D) trade is likely to be harmful to neither country.E) trade is likely to have no effect on either country.Answer: D5) Who sells what to whomA) has been a major preoccupation of international economics.B) is not a valid concern of international economics.C) is not considered important for government foreign trade policy since such decisions are made in the private competitive market.D) is determined by political rather than economic factors.E) None of the aboveAnswer: A6) The insight that patterns of trade are primarily determined by international differences in labor productivity was first proposed byA) Adam Smith.B) David Hume.C) David Ricardo.D) Eli Heckscher.E) Lerner and Samuelson. Answer: C7) The euro, a common currency for most of the nations of Western Europe, was introducedA) before 1900.B) before 1990.C) before 2000.D) in order to snub the pride of the U.S.E) None of the above.Answer: C8) For the 50 years preceding 1994, international trade policies have been governedA) by the World Trade Organization.B) by the International Monetary Fund.C) by the World.D) by an international treaty known as the General Agreement on Tariffs and Trade (GATT).E) None of the above.Answer: D9) The international capital market isA) the place where you can rent earth moving equipment anywhere in the world.B) a set of arrangements by which individuals and firms exchange money now for promises to pay in the future.C) the arrangement where banks build up their capital by borrowing from the Central Bank.D) the place where emerging economies accept capital invested by banks.E) None of the above.Answer: B10) Since 1994, trade rules have been enforced byA) the WTO.B) the G10.C) the GATT.D) The U.S. Congress.E) None of the above.Answer:A11) Cost-benefit analysis of international tradeA) is basically useless.B) is empirically intractable.C) focuses attention primarily on conflicts of interest within countries.D) focuses attention on conflicts of interests between countries.E) None of the above.Answer: C12) An improvement in a country’s balance of payments means a decrease in its balance of payments deficit, or an increase in its surplus. In fact we know that a surplus in a balance of paymentsA) is good.B) is usually good.C) is probably good.D) may be considered bad.E) is always bad.Answer: D13) The GATT wasA) an international treaty.B) an international U.N. agency.C) an international IMF agency.D) a U.S. government agency.E) a collection of tariffs.Answer: A14) International economics can be divided into two broad sub-fieldsA) macro and micro.B) developed and less developed.C) monetary and barter.D) international trade and international money.E) static and dynamic.Answer: DInternational Economics, 8e (Krugman)Chapter 2 World Trade: An Overview2.1 Who Trades with Whom?1) What percent of all world production of goods and services is exported to other countries?A) 10%B) 30%C) 50%D) 100%E) None of the above.Answer: B2) The gravity model offers a logical explanation for the fact thatA) trade between Asia and the U.S. has grown faster than NAFTA trade.B) trade in services has grown faster than trade in goods.C) trade in manufactures has grown faster than in agricultural products.D) Intra-European Union trade exceeds International Trade of the European Union.E) None of the above.Answer: D3) According to the gravity model, a characteristic that tends to affect the probability of trade existing betweenany two countries isA) their cultural affinity.B) the average weight/value of their traded goods.C) their colonial-historical ties.D) the distance between them.E) the number of varieties produced on the average by their industries.Answer: D4) Why does the gravity model work?A) Large economies became large because they were engaged in international trade.B) Large economies have relatively large incomes, and hence spend more on government promotion of trade and investment.C) Large economies have relatively larger areas which raises the probability that a productive activity will take place within the borders of that country.D) Large economies tend to have large incomes and tend to spend more on imports.E) None of the above.Answer: D5) The two neighbors of the United States do a lot more trade with the United States than European economiesof equal size.A) This contradicts predictions from gravity models.B) This is consistent with predictions from gravity models.C) This is relevant to any inferences that may be drawn from gravity models.D) This is because these neighboring countries have exceptionally large GDPs.E) None of the above.Answer: B6) Since World War II (the early 1950s), the proportion of most countries' production being used in some other countryA) remained constant.B) increased.C) decreased.D) fluctuated widely with no clear trend.E) both A and D above.Answer: B7) Since World War II, the relative importance of raw materials, including oil, in total world tradeA) remained constant.B) increased.C) decreased.D) fluctuated widely with no clear trendE) both A and D above.Answer: C8) In the current Post-Industrial economy, international trade in services (including banking and financial services)A) dominates world trade.B) does not exist.C) is relatively small.D) is relatively stagnant.E) None of the above.Answer: C9) In the pre-World War I period, the U.S. exported primarilyA) manufactured goods.B) services.C) primary products including agricultural.D) technology intensive products.E) None of the above.Answer: C10) In the pre-World War I period, the United Kingdom exported primarilyA) manufactured goods.B) services.C) primary products including agricultural.D) technology intensive products.E) None of the above.Answer:A11) In the present, most of the exports from China are inA) manufactured goods.B) services.C) primary products including agricultural.D) technology intensive products.E) None of the above.Answer: AInternational Economics, 8e (Krugman)Chapter 3 Labor Productivity and Comparative Advantage: The Ricardian Model1) Trade between two countries can benefit both countries ifA) each country exports that good in which it has a comparative advantage.B) each country enjoys superior terms of trade.C) each country has a more elastic demand for the imported goods.D) each country has a more elastic supply for the exported goods.E) Both C and D.Answer: A2) In order to know whether a country has a comparative advantage in the production of one particular product we need information on at least ________ unit labor requirementsA) oneB) twoC) threeD) fourE) fiveAnswer: D3) A country engaging in trade according to the principles of comparative advantage gains from trade because itA) is producing exports indirectly more efficiently than it could alternatively.B) is producing imports indirectly more efficiently than it could domestically.C) is producing exports using fewer labor units.D) is producing imports indirectly using fewer labor units.E) None of the above.Answer: B4) Given the information in the table above, if it is ascertained that Foreign uses prison-slave labor to produce its exports, then home shouldA) export cloth.B) export widgets.C) export both and import nothing.D) export and import nothing.E) All of the above.Answer: A5) Given the information in the table above, if the Home economy suffered a meltdown, and theUnit Labor Requirements doubled to 30 for cloth and 60 for widgets then home shouldA) export cloth.B) export widgets.C) export both and import nothing.D) export and import nothing.E) All of the above.Answer: A6) The earliest statement of the principle of comparative advantage is associated withA) David Hume.B) David Ricardo.C) Adam Smith.D) Eli Heckscher.E) Bertil Ohlin.Answer: B7) The Gains from Trade associated with the principle of Comparative Advantage depends onA) the trade partners must differ in technology or tastes.B) there can be no more goods traded than the number of trade partners.C) there may be no more trade partners than goods traded.D) All of the above.E) None of the above.Answer: A8) The Ricardian model demonstrates thatA) trade between two countries will benefit both countries.B) trade between two countries may benefit both regardless of which good each exports.two countries may benefit both if each exports the product in which it has a comparative advantage. C)trade betweenD) trade between two countries may benefit one but harm the other.E) None of the above.Answer: C9) Given the information in the table aboveA) neither country has a comparative advantage.B) Home has a comparative advantage in cloth.C) Foreign has a comparative advantage in cloth.D) Home has a comparative advantage in widgets.E) Home has a comparative advantage in both products.Answer: B10) Given the information in the table above, if wages were to double in Home, then Home shouldA) export cloth.B) export widgets.C) export both and import nothing.D) export and import nothing.E) All of the above.Answer: A11) In a two product two country world, international trade can lead to increases inA) consumer welfare only if output of both products is increased.B) output of both products and consumer welfare in both countries.C) total production of both products but not consumer welfare in both countries.D) consumer welfare in both countries but not total production of both products.E) None of the above.Answer: B12) A nation engaging in trade according to the Ricardian model will find its consumption bundleA) inside its production possibilities frontier.B) on its production possibilities frontier.C) outside its production possibilities frontier.D) inside its trade-partner's production possibilities frontier.E) on its trade-partner's production possibilities frontier.Answer: C13) In the Ricardian model, if a country's trade is restricted, this will cause all except which?A) limit specialization and the division of laborB) reduce the volume of trade and the gains from tradeC) cause nations to produce inside their production possibilities curvesD) may result in a country producing some of the product of its comparative disadvantageE) None of the above.Answer: C14) If the world terms of trade for a country are somewhere between the domestic cost ratio of Hand that of F, thenA) country H but not country F will gain from trade.B) country H and country F will both gain from trade.C) neither country H nor F will gain from trade.D) only the country whose government subsidizes its exports will gain.E) None of the above.Answer: B15) According to Ricardo, a country will have a comparative advantage in the product in which itsA) labor productivity is relatively low.B) labor productivity is relatively high.C) labor mobility is relatively low.D) labor mobility is relatively high.E) None of the above.Answer: B16)Assume that labor is the only factor of production and that wages in the United States equal $20 per hour while wages in Japan are $10 per hour. Production costs would be lower in the United States as compared to Japan ifA) U.S. labor productivity equaled 40 units per hour and Japan's 15 units per hour.B) U.S. productivity equaled 30 units per hour whereas Japan's was 20.C) U.S. labor productivity equaled 20 and Japan's 30.D) U.S. labor productivity equaled 15 and Japan's 25 units per hour.E) None of the above.Answer: A17) Let us define the real wage as the purchasing power of one hour of labor. In the Ricardian 2X2 model, if twocountries under autarky engage in trade thenA) the real wage will not be affected since this is a financial variable.B) the real wage will increase only if a country attains full specialization.C) the real wage will increase in one country only if it decreases in the other.D) the real wage will rise in both countries.E) None of the above.Answer: D18) In a two country and two product Ricardian model, a small country is likely to benefit more than the largecountry becauseA) the large country will wield greater political power, and hence will not yield to market signals.B) the small country is less likely to trade at price equal or close to its autarkic (domestic) relative prices.C) the small country is more likely to fully specialize.D) the small country is less likely to fully specialize.E) None of the above.Answer: B19) An examination of the Ricardian model of comparative advantage yields the clear result thattrade is (potentially) beneficial for each of the two trading partners since it allows for anexpanded consumption choice for each. However, for the world as a whole the expansion ofproduction of one product must involve a decrease in the availability of the other, so that it isnot clear that trade is better for the world as a whole as compared to an initial situation ofnon-trade (but efficient production in each country). Are there in fact gains from trade for theworld as a whole? Explain.Answer: If we were to combine the production possibility frontiers of the two countries to create a single world production possibility frontier, then it is true that any change in production points (from autarky tospecialization with trade) would involve a tradeoff of one good for another from the world'sperspective. In other words, the new solution cannot possibly involve the production of more of bothgoods. However, since we know that each country is better off at the new solution, it must be true thatthe original points were not on the trade contract curve between the two countries, and it was in factpossible to make some people better off without making others worse off, so that the new solutiondoes indeed represent a welfare improvement from the world's perspective.20）Given the information in the table above. What is the opportunity cost of Cloth in terms of Widgets in Foreign? Answer: One half a widget.21) Given the information in the table above. If these two countries trade these two goods in the context of the Ricardian model of comparative advantage, then what is the lower limit of the world equilibrium price of widgets? Answer: 1/2 Cloths.22) Given the information in the table above. If these two countries trade these two goods with each other incontext of the Ricardian model of comparative advantage, what is the lower limit for the price of cloth? Answer: One half a widget.23) Given the information in the table above. What is the opportunity cost of cloth in terms of Widgets inForeign?Answer: 2 widgets.24) If a production possibilities frontier is bowed out (concave to the origin), then production occurs underconditions ofA) constant opportunity costs.B) increasing opportunity costs.C) decreasing opportunity costs.D) infinite opportunity costs.E) None of the above.Answer: B25) If the production possibilities frontier of one the trade partners ("Country A") is bowed out (concave to theorigin), then increased specialization in production by that country willA) increase the economic welfare of both countries.B) increase the economic welfare of only Country A.C) decrease the economic welfare of Country A.D) decrease the economic welfare of Country B.E) None of the above.Answer: A26)If one country's wage level is very high relative to the other's (the relative wage exceeding the relative productivity ratios), thenA) it is not possible that producers in each will find export markets profitable.B) it is not possible that consumers in both countries will enhance their respective welfares throughimports.C) it is not possible that both countries will find gains from trade.D) it is possible that both will enjoy the conventional gains from trade.E) None of the above.Answer: D27) In a two-country, two-product world, the statement "Germany enjoys a comparative advantageover France in autos relative to ships" is equivalent toA) France having a comparative advantage over Germany in ships.B) France having a comparative disadvantage compared to Germany in autos and ships.C) Germany having a comparative advantage over France in autos and ships.D) France having no comparative advantage over Germany.E) None of the above.Answer: A28) Suppose the United states production possibility frontier was flatter to the widget axis, whereasGermany's was flatter to the butter axis. We now learn that the German wage doubles, but U.S.wages do not change at all. We now know thatA) the United States has no comparative advantage.B) Germany has a comparative advantage in butter.C) the United States has a comparative advantage in butter.D) Not enough information is given.E) None of the above.Answer: B29) We know that in antiquity, China exported silk because no-one in any other country knew how to producethis product. From this information we learn thatA) China enjoyed a comparative advantage in silk.B) China enjoyed an absolute advantage, but not a comparative advantage in silk.C) no comparative advantage exists because technology was not diffused.D) China should have exported silk even though it had no comparative advantage.E) None of the above.Answer: A30) The evidence cited in the chapter using the examples of the East Asia New IndustrializingCountries suggests that as international productivities converge, so do international wage levels.Why do you suppose this happened for the East Asian NICs? In light of your answer, what doyou think is likely to happen to the relative wages (relative to those in the United States) ofChina in the coming decade? Explain your reasoning.Answer: Following the logic of the Ricardian model of comparative advantage, the East Asian countries played to their respective comparative advantages. This allowed the world demand to provide excessdemands for their relatively abundant labor, which in turn tended to raise these wages. If Chinafollows the same pattern, their wages levels should also be expected over time to converge to those intheir industrialized country markets.Answers to Textbook Problems1. a. The production possibility curve is a straight line that intercepts the apple axis at 400(1200/3)and the banana axis at 600(1200/2).b. The opportunity cost of apples in terms of bananas is 3/2. It takes three units of labor toharvest an apple but only two units of labor to harvest a banana. If one foregoes harvesting an apple,this frees up three units of labor. These 3 units of labor could then be used to harvest 1.5 bananas.c. Labor mobility ensures a common wage in each sector and competition ensures the price ofgoods equals their cost of production. Thus, the relative price equals the relative costs, which equalsthe wage times the unit labor requirement for apples divided by the wage times the unit laborrequirement for bananas. Since wages are equal across sectors, the price ratio equals the ratio of the unit labor requirement, which is 3 apples per 2 bananas. 2. a. The production possibility curve is linear, with the intercept on the apple axis equal to 160(800/5) and the intercept on the banana axis equal to 800(800/1).b. The world relative supply curve is constructed by determining the supply of apples relative to the supply of bananas at each relative price. The lowest relative price at which apples are harvested is 3 apples per 2 bananas. The relative supply curve is flat at this price. The maximum number of apples supplied at the price of 3/2 is 400 supplied by Home while, at this price, Foreign harvests 800 bananas and no apples, giving a maximum relative supply at this price of 1/2. This relative supply holds for any price between 3/2 and 5. At the price of 5, both countries would harvest apples. The relative supply curve is again flat at 5. Thus, the relative supply curve is step shaped, flat at the price 3/2 from the relative supply of 0 to 1/2, vertical at the relative quantity 1/2 rising from 3/2 to 5, and then flat again from 1/2 to infinity.International Economics, 8e (Krugman)Chapter 4 Resources, Comparative Advantage, and Income Distribution1) In the 2-factor, 2 good Heckscher-Ohlin model, an influx of workers from across the border wouldA) move the point of production along the production possibility curve.B) shift the production possibility curve outward, and increase the production of both goods.C) shift the production possibility curve outward and decrease the production of the labor-intensiveproduct.D) shift the production possibility curve outward and decrease the production of the capital-intensiveproduct.E) None of the above.Answer: D2) In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ inA) tastes.B) military capabilities.C) size.D) relative availabilities of factors of production.E) labor productivities.Answer: D3) The Heckscher-Ohlin model differs from the Ricardian model of Comparative Advantage in that the formerA) has only two countries.B) has only two products.C) has two factors of production.D) has two production possibility frontiers (one for each country).E) None of the above.Answer: C4) "A good cannot be both land- and labor-intensive." Discuss.Answer: In a two good, two factor model, such as the original Heckscher-Ohlin framework, the factorintensities are relative intensities. Hence, the relevant statistic is either workers per acre (or acres perworker); or wage per rental unit (or rental per wage). In order to illustrate the logic of the statementabove, let us assume that the production of a broom requires 4 workers and 1 acre. Also, let us assumethat the production of one bushel of wheat requires 40 workers and 80 acres. In this case the acres perperson required to produce a broom is one quarter, whereas to produce a bushel of wheat requires 2 acres per person. The wheat is therefore (relatively) land intensive, and the broom is (relatively) labor intensive.5) "No country is abundant in everything." Discuss.Answer: The concept of relative (country) factor abundance is (like factor intensities) a relative concept. When we identify a country as being capital intensive, we mean that it has more capital per worker than doesthe other country. If one country has more capital worker than another, it is an arithmeticimpossibility that it also has more workers per unit capital.6) Refer to above figure. Can you guess which group of producers in Country P might lobby against free trade? Answer:In Country P, the owners of the relatively scarce factor of production are the owners of capital. Their relative and realincomes will decrease, and so they may well attempt to lobby for protectionism, which may prevent the country frommoving to a free trade equilibrium.An Economy can produce good 1 using labor and capital and good 2 using labor and land. The total supply of labor is 100 units. Given the supply of capital, the outputs of the two goods depends on labor input as follows:7) Refer to the table above.(a) Graph the production functions for good 1 and good 2(b) Graph the production possibility frontier. Why is it curved?Answer: The production possibility frontier is curved because of the diminishing returns associated with the expansion of output in the short run in each of the two industries.8) In the 2-factor, 2 good Heckscher-Ohlin model, a change from autarky (no trade) to trade will benefit theowners ofA) capital.B) the relatively abundant factor of production.C) the relatively scarce factor of production.D) the relatively inelastic factor of production.E) the factor of production with the largest elasticity of substitution.Answer: B9) According to the Heckscher-Ohlin model, the source of comparative advantage is a country'sA) technology.B) advertising.C) human capital.D) factor endowments.E) Both A and B.Answer: D10) The Hechscher-Ohlin model states that a country will have a comparative advantage in the good or servicewhose production is relatively intensive in the ________ with which the country is relatively abundant.A) tastesB) technologyC) factor of productionD) opportunity costE) scale economyAnswer: C11) According to the Hecksher-Ohlin model,A) everyone automatically gains from trade.B) the scarce factor necessarily gains from trade.C) the gainers could compensate the losers and still retain gains.D) a country gains if its exports have a high value added.E) None of the above.Answer:CAssume that only two countries, A and B, exist.12) Refer to the table above. If good S is capital intensive, then following the Heckscher-Ohlin Theory,A) country A will export good S.B) country B will export good S.C) both countries will export good S.D) trade will not occur between these two countries.E) Insufficient information is given.Answer: B13) In international-trade equilibrium in the Heckscher-Ohlin model,A) the capital rich country will charge less for the capital intensive good than the price paid by the capital poor country for the capital-intensive good.B) the capital rich country will charge the same price for the capital intensive good as that paid for it by the capital poor country.C) the capital rich country will charge more for the capital intensive good than the price paid by the capital poor country for the capital-intensive good.D) the workers in the capital rich country will earn more than those in the poor country.E) the workers in the capital rich country will earn less than those in the poor country.Answer: B14) The Heckscher-Ohlin model predicts all of the following exceptA) which country will export which product.B) which factor of production within each country will gain from trade.C) the volume of trade.D) that wages will tend to become equal in both trading countries.。

(完整word版)国际商务英文版 chapter1 练习

Chapter 1 GlobalizationTrue / False Questions1. The shift toward a more integrated and interdependent world economy is referred to asglobalization.True False2. A company does not need a large size to facilitate, and benefit from, the globalization ofmarkets.True False3. Companies hope to lower their overall cost structure or improve the quality orfunctionality of their product offering through globalization of production.True False4. The most global markets currently are markets for consumer products.True False5. Outsourcing is a process that is limited to manufacturing enterprises.True False6. The health care sector in the U.S. cannot avail the benefits of outsourcing to low-costproducers in other nations because of the nature of the work.True False7. The World Bank has focused on policing the world trading system and making surenation-states adhere to the rules laid down in trade treaties.True False8. The World Bank is known as the lender of the last resort.True False9. One of the UN's central mandates is the promotion of higher standards of living, fullemployment, and conditions of economic and social progress and development.True False10. In 2008 and 2009, the GATT became the forum though which major nations attempted tolaunch a coordinated policy response to the global financial crisis, which started inAmerica.True False11. The Uruguay Round, finalized in December 1993, reduced protection for patents,trademarks, and copyrights.True False12. "Beggar thy neighbor" retaliatory trade policies involved countries progressively loweringtrade barriers against each other, which contributed to the Great Depression of the 1930s.True False13. Rivers Inc., a U.S. based sports apparel manufacturer, sets up a production unit in Chinato take advantage of the lower labor costs there. This is an example of foreign directinvestment.True False14. World Bank gives an aid of 100 million dollars to Kenya for creating rural health carefacilities. This is an example of foreign direct investment.True False15. The lowering of barriers to international trade enables firms to view the world, rather thana single country, as their market.True False16. According to WTO data, the volume of world merchandise trade has grown faster than theworld economy since 1950.True False17. The expansion of world trade implies that nations are becoming less dependent on eachother for important goods and services.True False18. Over the past 30 years the flow of FDI has accelerated faster than the growth in worldtrade and world output.True False19. The globalization of markets and production and the resulting growth of world trade,foreign direct investment, and imports all imply that firms are finding their home markets protected from foreign competitors.True False20. The cost of microprocessors continues to fall, while their power increases. This statementsupports the predictions made by Moore's Law.True False21. According to critics of globalization, today's interdependent global economy limits a nation'snational sovereignty.True False22. Critics of globalization suggest that over the last century, the gap between the rich andpoor nations of the world has shrunken.True False23. Supporters of debt relief argue that new democratic governments in poor nations shouldnot be forced to honor debts incurred by corrupt and dictatorial predecessors.True False24. A firm does not have to become a multinational enterprise to engage in internationalbusiness.True False25. Differences between countries require that an international business vary its practicescountry by country.True FalseMultiple Choice Questions26. The World Trade Organization promotes _____.A. l owering of barriers to cross-border trade and investmentB. i nfrastructural development in poor nations through low-interest loansC. s tate ownership of major enterprisesD. r egulation of national economies27. Which of the following is true about the International Monetary Fund?A. I t is primarily responsible for policing the world trading system.B. I t is seen as the lender of last resort to nation-states whose economies are in turmoil.C. I t is responsible for establishing multinational treaties to govern the global businesssystem.D. I t was established to formulate a coordinated policy response to financial crises indeveloping nations.28. The _____ was established on October 24, 1945, by 51 countries committed to preservingpeace through international cooperation and collective security.A. W orld Trade OrganizationB. U nited NationsC. G20txD. W orld Bank29. The G20tx was originally established to _____.A. p reserve peace through international cooperation and collective securityB. m aintain order in the international monetary systemC. f ormulate a coordinated policy response to financial crises in developing nationsD. m anage, regulate, and police the global marketplace30. _____ occurs when a firm exports goods or services to consumers in another country.A. I nternational tradeB. F oreign direct investmentC. I nward investmentD. O utsourcing31. In late 2001, the WTO launched a new round of talks in Doha aimed at:A. h elping member states to cope with financial crisis.B. f urther liberalization of the global trade and investment framework.C. p rotecting national economies from global competition.D. p romoting higher standards of living in all member states.32. Which of the following is NOT included in world merchandise trade?A. M anufactured goodsB. A gricultural goodsC. S ervicesD. M ining products33. _____ have/has the most to gain from reductions in agricultural tariffs and subsidies thatare a part of the Doha agenda.A. T he world's developed nationsB. T he world's poorer nationsC. E uropean nationsD. T he United States34. Which of the following is NOT a consequence of the reduction in trade barriers andrestrictions on FDI since 1950?A. F irms are dispersing parts of their production process to global locations to drive downproduction costs and increase product quality.B. T he economies of the world's nation states are becoming more intertwined.C. N ations are becoming more independent of each other for important goods andservices.D. T he world has become significantly wealthier since 1950.35. The financial crisis in the U.S. in 2009 was triggered by _____.A. t he global hike in the price of crude oilB. t he slowdown in U.S. importsC. t he problems in the U.S. subprime mortgage lending marketD. t he artificial fixing of currency rate by China36. _____ predicts that the power of microprocessor technology doubles and its cost ofproduction falls in half every 18 months.A. K eynes's LawB. S ay's LawC. M oore's LawD. S ullivan Principles37. Containerization allows:A. r eduction of the time needed to get from one location to another.B. s implification of transshipment from one mode of transport to another.C. b uyers and sellers to find each other easily.D. e nterprises to coordinate and control a globally dispersed production system.38. The relative decline of the United States in the share of world output and world exportsreflects _____.A. a n increase in the barriers to foreign trade in the U.S.B. t he deepening of the global financial crisisC. t he reduced industrialization in developing nationsD. t he growth in the economic development of the world economy39. In the 1970s, many Japanese firms invested in North America and Europe:A. t o avoid a highly competitive domestic market.B. t o exploit high domestic tariff barriers.C. a s a hedge against unfavorable currency movements.D. t o take advantage of low labor costs.40. What is the total cumulative value of foreign investments best referred to as?A. A ccumulation of foreign sharesB. P ortfolio investmentsC. S tock of foreign direct investmentsD. S tock market investments36. Throughout the 1990s, the amount of foreign direct investment directed at both developedand developing nations increased dramatically. This trend reflects:A. a slowdown in global economic activity.B. t he increasing share of the U.S. in the total FDI stock.C. t he decline in cross-border flows of foreign direct investment.D. t he increasing internationalization of business corporations.37. Which of the following countries has been the largest recipient of foreign directinvestment and received about $60 billion to $100 billion a year in inflows in 2004-2009?A. B razilB. R ussiaC. I ndiaD. C hina68. A multinational enterprise (MNE) is a firm that _____.A. e xports its products to multiple countriesB. h as production units in more than two countriesC. d oes most of its business on the InternetD. l ists its securities on a public exchange39. Which of these statements pertaining to cross-border FDI flows is true?A. T here was a growth of FDI between 2004 and 2007.B. A slump in FDI from 1998 to 2000 was followed by a surge from 2001 to 2003.C. A mong developing nations, the largest recipient of FDI has been Russia.D. T he dramatic increase in FDI reflects the decreasing internationalization of businesscorporations.40. Since the 1960s, which of the following has been a notable trend in the demographics ofthe multinational enterprise?A. T he decline of multinational companies in the manufacturing sectorB. T he growth of government-owned multinational enterprisesC. T he decline of non-U.S. multinationalsD. T he growth of mini-multinationals46. NAFTA was passed only after:A. C hina agreed to establish a higher minimum wage.B. t he U.S. agreed to limit the number of jobs that could be outsourced.C. M exico committed to tougher enforcement of environmental protection regulations.D. C anada committed to establish new limits on FDI.47. Globalization is criticized because it increases the power of _____.A. g overnments to own enterprisesB. u nskilled labor to form labor unionsC. s upranational organizations over nation-statesD. n ation-states to regulate markets and reduce competition48. The World Trade Organization has estimated that the developed nations of the world canraise global economic welfare by $128 billion by:A. r emoving subsidies given to their agricultural producers.B. i ncreasing tariff barriers to trade in agriculture.C. i ncreasing outsourcing of manufacturing processes.D. R educing defence expenditure.49. An international business, unlike a multinational enterprise, _____.A. n eeds to have manufacturing units in at least two foreign nationsB. n eeds to manufacture products or provide services that target a global marketC. n eed not customize its products to the requirements of national marketsD. n eed not invest directly in operations in other countries50. Which of the following statements is true about an international business?A. A n international business needs to invest directly in operations in other countries.B. A n international business needs to have homogenous practices across countries.C. A n international business can be managed in the same way that a domestic business ismanaged.D. A n international business must find ways to work within the limits imposed bygovernment intervention.。

国际财务管理英文版第版马杜拉答案Chapter

Chapter 3International Financial Markets Lecture OutlineMotives for Using International Financial Markets Motives for Investing in Foreign MarketsMotives for Providing Credit in Foreign MarketsMotives for Borrowing in Foreign MarketsForeign Exchange MarketHistory of Foreign ExchangeForeign Exchange TransactionsExchange QuotationsForeignInterpretingCurrency Futures and Options MarketsInternational Money MarketOrigins and DevelopmentStandardizing Global Bank RegulationsInternational Credit MarketSyndicated LoansInternational Bond MarketEurobond MarketDevelopment of Other Bond MarketsComparing Interest Rates Among CurrenciesInternational Stock MarketsIssuance of Foreign Stock in the U.S.Issuance of Stock in Foreign MarketsComparison of International Financial MarketsHow Financial Markets Affect an MNC’s ValueChapter ThemeThis chapter identifies and discusses the various international financial markets used by MNCs. These markets facilitate day-to-day operations of MNCs, including foreign exchange transactions, investing in foreign markets, and borrowing in foreign markets.Topics to Stimulate Class Discussion1. Why do international financial markets exist?2. How do banks serve international financial markets?3. Which international financial markets are most important to a firm that consistently needsshort-term funds? What about a firm that needs long-term funds?Critical debateShould firms that go public engage in international offerings?Proposition Yes. When a firm issues shares to the public for the first time in an initial public offering (IPO), it is naturally concerned about whether it can place all of its shares at a reasonable price. It will be able to issue its shares at a higher price by attracting more investors. It will increase its demand by spreading the shares across countries. The higher the price at which it can issue shares, the lower is its cost of using equity capital. It can also establish a global name by spreading shares across countries.Opposing view No. If a firm spreads its shares across different countries at the time of the IPO, there will be less publicly traded shares in the home country. Thus, it will not have as much liquidity in the secondary market. Investors desire shares that they can easily sell in the secondary market, which means that they require that the shares have liquidity. To the extent that a firm reduces its liquidity in the home country by spreading its share across countries, it may not attract sufficient home demand for the shares. Thus, its efforts to create global name recognition may reduce its name recognition in the home country.With whom do you agree? State your reasons. Use InfoTrac or some other search engine to learn more about this issue. Which argument do you support? Offer your own opinion on this issue.ANSWER: The key is that students recognize the tradeoff involved. A firm that engages in a relatively small IPO will have limited liquidity even when all of the stock is issued in the home country. Thus, it should not consider issuing stock internationally. However, firms with larger stock offerings may be in a position to issue a portion of their shares outside the home country. They should not spread the stocks across several countries, but perhaps should target one or two countries where they conduct substantial business. They want to ensure sufficient liquidity in each of the foreign countries where they sell shares.Stock Markets are inefficientPropositionI cannot believe that if the value of the euro in terms of, say, the British pound increases three days in a row, on the fourth day there is still a 50:50 chance that it will go up or down in value. I think that most investors will see a trend and will buy, therefore the price is morelikely to go up. Also, if the forward market predicts a rise in value, on average, surely it is going to rise in value. In other words, currency prices are predictable. And finally, if it were so unpredictable and therefore unprofitable to the speculator, how is it that there is such a vast sum of money being traded every day for speculative purposes – there is no smoke without fire.The simple answer is that if that is what you believe, buy currencies that have viewOpposingincreased three days in a row and on average you should make a profit, buy currencies where the forward market shows an increase in value. The fact is that there are a lot of investors with just your sort of views. The market traders know all about such beliefs and will price the currency so that such easy profit (their loss) cannot be made. Look at past currency rates for yourself, check all fourth day changes after three days of rises, any difference is going to be not enough to cover transaction costs or trading expenses and the slight inaccuracy in your figures which are likely to be closing day mid point of the bid/ask spread. No, all currency movements are related to information and no-one knows if tomorrows news will be better or worse than expected.With whom do you agree? Could there be undiscovered patterns? Could some movements not be related to information? Could some private news be leaking out?ANSWER: Clearly there are no obvious patterns. Discussion on the impossibility of obvious patterns is worth emphasizing. However, does market inefficiency necessarily involve patterns, could market manipulation be occasional. There is worrying evidence from share price movements that there is unusual movement before announcements on many occasions, so the ideathat traders do not occasionally collude and move the price without supporting economic evidence is not an unreasonable view. Proof is however difficult as we have to separate anticipation from prior knowledge, the lucky speculator from the speculator who was in the know.Answers to End of Chapter Questions1. Motives for Investing in Foreign Money Markets. Explain why an MNC may invest fundsin a financial market outside its own country.ANSWER: The MNC may be able to earn a higher interest rate on funds invested in a financial market outside of its own country. In addition, the exchange rate of the currency involved may be expected to appreciate.2. Motives for Providing Credit in Foreign Markets. Explain why some financial institutionsprefer to provide credit in financial markets outside their own country.ANSWER: Financial institutions may believe that they can earn a higher return by providing credit in foreign financial markets if interest rate levels are higher and if the economic conditions are strong so that the risk of default on credit provided is low. The institutions may also want to diversity their credit so that they are not too exposed to the economic conditions in any single country.3. Exchange Rate Effects on Investing. Explain how the appreciation of the Australian dollaragainst the euro would affect the return to a French firm that invested in an Australian money market security.ANSWER: If the Australian dollar appreciates over the investment period, this implies that the French firm purchased the Australian dollars to make its investment at a lower exchange rate than the rate at which it will convert A$ to euros when the investment period is over.Thus, it benefits from the appreciation. Its return will be higher as a result of this appreciation.4. Exchange Rate Effects on Borrowing. Explain how the appreciation of the Japanese yenagainst the UK pound would affect the return to a UK firm that borrowed Japanese yen and used the proceeds for a UK project.ANSWER: If the Japanese yen appreciates over the borrowing period, this implies that the UK firm converted yen to pounds at a lower exchange rate than the rate at which it paid for yen at the time it would repay the loan. Thus, it is adversely affected by the appreciation. Its cost of borrowing will be higher as a result of this appreciation.5. Bank Services. List some of the important characteristics of bank foreign exchange servicesthat MNCs should consider.ANSWER: The important characteristics are (1) competitiveness of the quote, (2) the firm’s relationship with the bank, (3) speed of execution, (4) advice about current market conditions, and (5) forecasting advice.6. Bid/ask Spread. Delay Bank’s bid price for US dollars is £0.53 and its ask price is £0.55.What is the bid/ask percentage spread?ANSWER: (£0.55– £0.53)/£0.55 = .036 or 3.6%7. Bid/ask Spread. Compute the bid/ask percentage spread for Mexican peso in which the askrate is 20.6 New peso to the dollar and the bid rate is 21.5 New peso to the dollar.ANSWER: direct rates are 1/20.6 = $0.485:1 peso as the ask rate and 1/21.5 = $0.465:1 peso as the bid rate so the spread is[($0.485 – $0.465)/$0.485] = .041, or 4.1%. Note that the spread is fro the Mexiccan peso not the dollar.8. Forward Contract. The Wolfpack ltd is a UK exporter that invoices its exports to the UnitedStates in dollars. If it expects that the dollar will appreciate against the pound in the future, should it hedge its exports with a forward contract? Explain..ANSWER: The forward contract can hedge future receivables or payables in foreign currencies to insulate the firm against exchange rate risk. Yet, in this case, the Wolfpack Corporation should not hedge because it would benefit from appreciation of the dollar when it converts the dollars to pounds.9. Euro. Explain the foreign exchange situation for countries that use the euro when theyengage in international trade among themselves.ANSWER: There is no foreign exchange. Euros are used as the medium of exchange.10. Indirect Exchange Rate. If the direct exchange rate of the euro is worth £0.685, what is theindirect rate of the euro? That is, what is the value of a pound in euros?ANSWER: 1/0.685 = 1.46 euros.11. Cross Exchange Rate. Assume Poland’s currency (the zloty) is worth £0.17 and theJapanese yen is worth £0.005. What is the cross (implied) rate of the zloty with respect to yen?ANSWER: £0.17/£0.005 = 34 zloty:1 yen12. Syndicated Loans. Explain how syndicated loans are used in international markets.ANSWER: A large MNC may want to obtain a large loan that no single bank wants to accommodate by itself. Thus, a bank may create a syndicate whereby several other banks also participate in the loan.13. Loan Rates. Explain the process used by banks in the Eurocredit market to determine the rateto charge on loans.ANSWER: Banks set the loan rate based on the prevailing LIBOR, and allow the loan rate to float (change every 6 months) in accordance with changes in LIBOR.14. International Markets. What is the function of the international money market? Brieflydescribe the reasons for the development and growth of the European money market. Explain how the international money, credit, and bond markets differ from one another.ANSWER: The function of the international money market is to efficiently facilitate the flow of international funds from firms or governments with excess funds to those in need of funds.Growth of the European money market was largely due to (1) regulations in the U.S. that limited foreign lending by U.S. banks; and (2) regulated ceilings placed on interest rates of dollar deposits in the U.S. that encouraged deposits to be placed in the Eurocurrency market where ceilings were nonexistent.The international money market focuses on short-term deposits and loans, while the international credit market is used to tap medium-term loans, and the international bond market is used to obtain long-term funds (by issuing long-term bonds).15. Evolution of Floating Rates. Briefly describe the historical developments that led to floatingexchange rates as of 1973.ANSWER: Country governments had difficulty in maintaining fixed exchange rates. In 1971, the bands were widened. Yet, the difficulty of controlling exchange rates even within these wider bands continued. As of 1973, the bands were eliminated so that rates could respond to market forces without limits (although governments still did intervene periodically).16. International Diversification. Explain how the Asian crisis would have affected the returnsto a UK. firm investing in the Asian stock markets as a means of international diversification.[See the chapter appendix.]ANSWER: The returns to the UK firm would have been reduced substantially as a result of the Asian crisis because of both declines in the Asian stock markets and because of currency depreciation. For example, the Indonesian stock market declined by about 27% from June 1997 to June 1998. Furthermore, the Indonesian rupiah declined against the U.S. dollar by 84%.17.Eurocredit Loans.a.With regard to Eurocredit loans, who are the borrowers?b. Why would a bank desire to participate in syndicated Eurocredit loans?c. What is LIBOR and how is it used in the Eurocredit market?ANSWER:a. Large corporations and some government agencies commonly request Eurocredit loans.b. With a Eurocredit loan, no single bank would be totally exposed to the risk that theborrower may fail to repay the loan. The risk is spread among all lending banks within the syndicate.c. LIBOR (London interbank offer rate) is the rate of interest at which banks in Europe lendto each other. It is used as a base from which loan rates on other loans are determined in the Eurocredit market.18. Foreign Exchange. You just came back from Canada, where the Canadian dollar was worth£0.43. You still have C$200 from your trip and could exchange them for pounds at the airport, but the airport foreign exchange desk will only buy them for £0.40. Next week, you will be going to Mexico and will need pesos. The airport foreign exchange desk will sell you pesos for £0.055 per peso. You met a tourist at the airport who is from Mexico and is on his way to Canada. He is willing to buy your C$200 for 1500 New Pesos. Should you accept the offer or cash the Canadian dollars in at the airport? Explain.ANSWER: Exchange with the tourist. If you exchange the C$ for pesos at the foreign exchange desk, the C$200 is multiplied by £0.40 and then divided by £0.055 ie a ratio of £0.40/0.055 = 7.27 pesos to the C$. The total pesos would be 200 x 7.27 = 1454 pesos, a little less than is being offered by the tourist.19. Foreign Stock Markets. Explain why firms may issue stock in foreign markets. Why mightMNCs issue more stock in Europe since the conversion to a single currency in 1999?ANSWER: Firms may issue stock in foreign markets when they are concerned that their home market may be unable to absorb the entire issue. In addition, these firms may have foreign currency inflows in the foreign country that can be used to pay dividends on foreign-issued stock. They may also desire to enhance their global image. Since the euro can be used in several countries, firms may need a large amount of euros if they are expanding across Europe.20. Stock Market Integration. Bullet plc a UK firm, is planning to issue new shares on theLondon Stock Exchange this month. The only decision still to be made is the specific day on which the shares will be issued. Why do you think Bullet monitors results of the Tokyo stock market every morning?ANSWER: The UK stock market prices sometimes follow Japanese market prices. Thus, the firm would possibly be able to issue its stock at a higher price in the UK if it can use the Japanese market as an indicator of what will happen in the UK market. However, this indicator will not always be accurate.Advanced Questions21. Effects of September 11. Why do you think the terrorist attack on the U.S. was expected tocause a decline in U.S. interest rates? Given the expectations for a potential decline in U.S.interest rates and stock prices, how were capital flows between the U.S. and other countries likely affected?ANSWER: The attack was expected to cause a weaker economy, which would result in lower U.S. interest rates. Given the lower interest rates, and the weak stock prices, the amount of funds invested by foreign investors in U.S. securities would be reduced.22. International Financial Markets. Carrefour the French Supermarket chain has established retail outlets worldwide. These outlets are massive and contain products purchased locally as well as imports. As Carrefour generates earnings beyond what it needs abroad, it may remit those earnings back to France. Carrefour is likely to build additional outlets especially in China.a. Explain how the Carrefour outlets in China would use the spot market in foreign exchange.ANSWER:The Carrefour stores in China need other currencies to buy products from other countries, and must convert the Chinese currency (yuan) into the other currencies in the spot market to purchase these products. They also could use the spot market to convert excess earnings denominated in yuan into euros, which would be remitted to the French parent.b. Explain how Carrefour might utilize the international money markets when it isestablishing other Carrefour stores in Asia.ANSWER: Carrefour may need to maintain some deposits in the Eurocurrency market that can be used (when needed) to support the growth of Carrefour stores in various foreign markets. When some Carrefour stores in foreign markets need funds, they borrow from banks in the Eurocurrency market. Thus, the Eurocurrency market serves as a deposit or lending source for Carrefour and other MNCs on a short-term basis. (Eurocurrency refers to international currencies, most likely the dollar, not just the euro!)c. Explain how Carrefour could use the international bond market to finance theestablishment of new outlets in foreign markets.ANSWER: Carrefour could issue bonds in the Eurobond market to generate funds needed to establish new outlets. The bonds may be denominated in the currency that is needed; then, once the stores are established, some of the cash flows generated by those stores could be used to pay interest on the bonds.23.Interest Rates. Why do interest rates vary among countries? Why are interest rates normallysimilar for those European countries that use the euro as their currency? Offer a reason why the government interest rate of one country could be slightly higher than that of the government interest rate of another country, even though the euro is the currency used in both countries.ANSWER: Interest rates in each country are based on the supply of funds and demand for funds for a given currency. However, the supply and demand conditions for the euro are dictated by all participating countries in aggregate, and do not vary among participating countries. Yet, the government interest rate in one country that uses the euro could be slightly higher than others that use the euro if it is subject to default risk. The higher interest rate would reflect a risk premium.Blades plc Case Study。

（完整word版）国际商务英文版chapter1练习.doc

（完整word版）国际商务英文版chapter1练习.docChapter 1 GlobalizationTrue / False Questions1.The shift toward a more integrated and interdependent world economy is referred to asglobalization.True False2. A company does not need a large size to facilitate, and benefit from, the globalization ofmarkets.True False/doc/033713163.html,panies hope to lower their overall cost structure or improve the quality or functionality of their product offering through globalization of production.True False4.The most global markets currently are markets for consumer products.True False5.Outsourcing is a process that is limited to manufacturing enterprises.True False6.The health care sector in the U.S. cannot avail the benefits of outsourcing to low-cost producers in other nations because of the nature of the work.True False7.The World Bank has focused on policing the world trading system and making surenation-states adhere to the rules laid down in trade treaties.True False8.The World Bank is known as the lender of the last resort.True False9.One of the UN's central mandates is the promotion of higher standards of living,full employment, and conditions of economic and social progress and development.True False10.In 2008 and 2009, the GATT became the forum though which major nations attemptedto launch a coordinated policy response to the global financial crisis, which started in America.True False11.The Uruguay Round, finalized in December 1993, reduced protection for patents,trademarks, and copyrights.True False12."Beggar thy neighbor" retaliatory trade policies involved countries progressively loweringtrade barriers against each other, which contributed to the Great Depression of the 1930s.True False13.Rivers Inc., a U.S. based sports apparel manufacturer, sets up a production unit in Chinato take advantage of the lower labor costs there. This is an example of foreign directinvestment.True False14.World Bank gives an aid of 100 million dollars to Kenyafor creating rural health carefacilities. This is an example of foreign direct investment.True False15.The lowering of barriers to international trade enables firms to view the world, rather thana single country, as their market.True False16.According to WTO data, the volume of world merchandise trade has grown faster than theworld economy since 1950.True False17.The expansion of world trade implies that nations are becoming less dependent oneach other for important goods and services.True False18.Over the past 30 years the flow of FDI has accelerated faster than the growth inworld trade and world output.True False19.The globalization of markets and production and the resulting growth of world trade,foreign direct investment, and imports all imply that firms are finding their home markets protected from foreign competitors.True False20.The cost of microprocessors continues to fall, while their power increases. This statementsupports the predictions made by Moore's Law.True False21.According to critics of globalization, today'sinterdependent global economy limits a nation'snational sovereignty.True False22.Critics of globalization suggest that over the last century, the gap between the rich andpoor nations of the world has shrunken.True False23.Supporters of debt relief argue that new democratic governments in poor nationsshould not be forced to honor debts incurred by corrupt and dictatorial predecessors.True False24.A firm does not have to become a multinational enterprise to engage in internationalbusiness.True False25.Differences between countries require that an international business vary itspractices country by country.True FalseMultiple Choice Questions26.The World Trade Organization promotes _____.A.lowering of barriers to cross-border trade and investmentB.infrastructural development in poor nations through low-interest loansC.state ownership of major enterprisesD.regulation of national economies27.Which of the following is true about the International Monetary Fund?A.It is primarily responsible for policing the world tradingsystem.B. It is seen as the lender of last resort to nation-states whose economies are in turmoil.C.It is responsible for establishing multinational treaties to govern the global businesssystem.D.It was established to formulate a coordinated policy response to financial crises indeveloping nations.28.The _____ was established on October 24, 1945, by 51 countries committed topreserving peace through international cooperation and collective security.A.World Trade OrganizationB.United NationsC.G20txD.World Bank29.The G20tx was originally established to _____.A.preserve peace through international cooperation and collective securityB.maintain order in the international monetary systemC.formulate a coordinated policy response to financial crises in developing nationsD.manage, regulate, and police the global marketplace30._____ occurs when a firm exports goods or services to consumers in another country.A.International tradeB.Foreign direct investmentC. Inward investmentD.Outsourcing31.In late 2001, the WTO launched a new round of talks in Doha aimed at:A.helping member states to cope with financial crisis.B.further liberalization of the global trade and investment framework.C.protecting national economies from global competition.D.promoting higher standards of living in all member states.32.Which of the following is NOT included in world merchandise trade?A.Manufactured goodsB.Agricultural goodsC.ServicesD.Mining products33._____ have/has the most to gain from reductions in agricultural tariffs and subsidiesthat are a part of the Doha agenda.A.The world's developed nationsB.The world's poorer nationsC.European nationsD.The United States34.Which of the following is NOT a consequence of the reduction in trade barriers andrestrictions on FDI since 1950?A.Firms are dispersing parts of their production process to global locations to drivedown production costs and increase product quality.B.The economies of the world's nation states are becoming more intertwined.C.Nations are becoming more independent of each other for important goods andservices.D.The world has become significantly wealthier since 1950.35.The financial crisis in the U.S. in 2009 was triggered by _____.A.the global hike in the price of crude oilB.the slowdown in U.S. importsC.the problems in the U.S. subprime mortgage lending marketD.the artificial fixing of currency rate by China36._____ predicts that the power of microprocessor technology doubles and its cost ofproduction falls in half every 18 months.A.Keynes's LawB.Say's LawC.Moore's LawD.Sullivan Principles37.Containerization allows:A.reduction of the time needed to get from one location to another.B. simplification of transshipment from one mode of transport to another.C.buyers and sellers to find each other easily.D.enterprises to coordinate and control a globally dispersed production system.38.The relative decline of the United States in the share of world output and world exportsreflects _____.A.an increase in the barriers to foreign trade in the U.S.B.the deepening of the global financial crisisC.the reduced industrialization in developing nationsD.the growth in the economic development of the world economy39.In the 1970s, many Japanese firms invested in North America and Europe:A.to avoid a highly competitive domestic market.B.to exploit high domestic tariff barriers.C.as a hedge against unfavorable currency movements.D.to take advantage of low labor costs.40.What is the total cumulative value of foreign investments best referred to as?A.Accumulation of foreign sharesB.Portfolio investmentsC.Stock of foreign direct investmentsD.Stock market investments36.Throughout the 1990s, the amount of foreign direct investment directed at both developedand developing nations increased dramatically. This trend reflects:A.a slowdown in global economic activity.B.the increasing share of the U.S. in the total FDI stock.C.the decline in cross-border flows of foreign direct investment.D.the increasing internationalization of business corporations.37.Which of the following countries has been the largest recipient of foreign direct investmentand received about $60 billion to $100 billion a year in inflows in 2004-2009?A.BrazilB.RussiaC.IndiaD.China68.A multinational enterprise (MNE) is a firm that _____.A.exports its products to multiple countriesB.has production units in more than two countriesC.does most of its business on the InternetD.lists its securities on a public exchange39. Which of these statements pertaining to cross-border FDI flows is true?A.There was a growth of FDI between 2004 and 2007.B.A slump in FDI from 1998 to 2000 was followed by a surge from 2001 to 2003.C.Among developing nations, the largest recipient of FDI has been Russia.D.The dramatic increase in FDI reflects the decreasing internationalization ofbusiness corporations.40.Since the 1960s, which of the following has been a notable trend in the demographicsof the multinational enterprise?A.The decline of multinational companies in the manufacturing sectorB.The growth of government-owned multinational enterprisesC.The decline of non-U.S. multinationalsD.The growth of mini-multinationals46.NAFTA was passed only after:A.China agreed to establish a higher minimum wage.B.the U.S. agreed to limit the number of jobs that could be outsourced.C.M exico committed to tougher enforcement of environmental protection regulations.D.Canada committed to establish new limits on FDI.47.Globalization is criticized because it increases the power of _____./doc/033713163.html,ernments to own enterprisesB.unskilled labor to form labor unionsC.supranational organizations over nation-statesD.nation-states to regulate markets and reduce competition48.The World Trade Organization has estimated that the developed nations of the worldcan raise global economic welfare by $128 billion by:A.removing subsidies given to their agricultural producers.B.increasing tariff barriers to trade in agriculture.C.increasing outsourcing of manufacturing processes.D.Reducing defence expenditure.49.An international business, unlike a multinational enterprise, _____.A.needs to have manufacturing units in at least two foreign nationsB.needs to manufacture products or provide services that target a global marketC.need not customize its products to the requirements of national marketsD.need not invest directly in operations in other countries50.Which of the following statements is true about an international business?A.An international business needs to invest directly in operations in other countries.B.An international business needs to have homogenous practices across countries.C.An international business can be managed in the same way that a domestic business ismanaged.D.An international business must find ways to work within the limits imposed bygovernment intervention.E.。

国际资本运作英文原版chapter1习题

国际资本运作英文原版chapter1习题1、In finance, an efficient market is one in which(a) p rices are assumed to be correct.(b)prices adjust quickly and accurately to new information.(c) p rices are the best allocators of capital in the macro economy.(d) All of the above.2、In the Anglo-American model of corporate governance, the primary goal of management is to(a) m aximize the wealth of all stakeholders.(b) maximize shareholder wealth.(c) m inimize costs.(d) minimize risk.3、Systematic risk can be defined as(a) t he total risk to the firm.(b) the risk of the individual security.(c) t he added risk that a firm’s shares bring to a diversified portfolio.(d) the risk that can be systematically diversified away.4、Unsystematic risk can be defined as(a) t he total risk to the firm.(b)the risk of the individual security.(c) t he added risk that a firm’s shares bring to a diversified portfolio.(d)the risk that can be systematically diversified away.5、 Systematic risk is of prime concern to management under the(a) p atient capital theory of governance.(b)corporate wealth maximization theory of governance.(c) A nglo-American theory of governance.(d)None of the above6、_______________________ is the study of how shareholders can motivate management to accept prescriptions of the shareholder wealth maximization model.(a) P atient capitalism(b)Agency theory(c) T he capital asset pricing model(d)The theory of multinational finance7、Which of the following is inconsistent with long-term corporate value maximization?(a) A focus on overly generous short-term stock options.(b)A focus on long-term wealth maximization.(c) T he concept of patient capitalism.(d)The avoidance of deceptive and dishonest business practices.8、The Stakeholder Capitalism Model(a) c learly places shareholders as the primary stakeholder.(b)combines the interests and inputs of shareholders, creditors, management, employees,and society.(c) h as financial profit as its goal and is often termed impatient capital.(d) is the Anglo–American model of corporate governance.9、The Shareholder Wealth Maximization Model(a) c ombines the interests and inputs of shareholders,creditors, management, employees,and society.(b)is being usurped by the Corporate Wealth Maximization Model as those types of MNEs dominate their global industry segments.(c) c learly places shareholders as the primary stakeholder.(d)is the dominant form of corporate management in the European-Japanese governance system.10、With shareholder wealth maximization as the manager’s goal, capital may be termed _____________.(a)i mpatient(b)patient(c) b orrowed(d)bought。

Unit1Globalization课后习题答案

Unit 1 GlobalizationLead-in1. Quiz1) B 2) C 3) D 4) A 5) A2. A Mini CaseSuggested answers:●As Zara continues to expand, it might have to open other distribution centers onother continents. Language, culture, and work relations may vary significantly from the closely-managed operation currently in place in Spain. The company may run into more specific challenges in accommodating customers’requirements due to a lack of cultural sensitivity. Zara’s expansion globally may pose the challenge of moving from a more centralized management style to a more global style.●Lorena needs to ensure that she has a truly international team in place withmembers from both multilingual and multicultural background; draw up a plan on how global logistics will support global expansion; start a succession plan and train new logistics managers who could be ready to take on overseas responsibilities; and encourage store managers to include suggestions on cultural specifics which may help in making the final product and brand expansion successful.Text AI.Reading Comprehension1.Determine whether the following statements are true or false. Write a T fortrue, an F for false, and an NG for not given.1) T 2) F 3) T 4) F 5) F 6) T 7) T 8) F 9) T 10) NG2.Essay Questions1)The modern multinational companies have had passed through three phases. Firstcame the 19th-century “international model”, with firms based in their home country and selling goods through overseas sales offices. This was followed by the classic multinational firm in which the parent company created smaller versions of itself in countries around the world. And now it has been replaced by a single integrated global entity in which the firm will move people and jobs anywhere in the world, based on the right cost, the right skills and the right business environment.2)The big attractions from emerging markets are low-cost labor, highly skilledpersonnel, and a chance to cooperate with the government as a potential customer.3)They are lacking the management talents who can practice and support businessoperating models that will allow them to generate profitable growth in more mature markets over the long term.4)The single biggest challenge facing Western multinationals is the lack ofemerging-market experience in their senior ranks. Moreover, multinationals have great trouble retaining the managers they do have in emerging markets.“Well-trained, good, honest people are scarce in emerging markets. Multinationals are better at training these people than emerging-market companies, which prefer to poach them once they are trained.”II.Blank-filling: Complete the following sentences with the words given in the box. Change the form when necessary.1)cutting-edge2)commoditized3)aggressive4)forge5) benchmark6) blueprint7) expatriates8) deploy9) ferocious10) substantialIII.Paraphrasing1.Rewriting: Rewrite the underlined part of each sentence in your own words.1) “In the 97 years of the company’s history, never had a particular kind of product or merchandise been managed outside the U.S.,”he says excitedly, noting that “Latin America now reports to Shanghai.”2) But the assault on its services business led by a trio of Indian outsourcing upstarts, Tata Consulting Services, Infosys and Wipro, posed a big threat to the field that might be the main sources of growth for the company as expected by Mr. Palmisano.3) In many emerging markets the most attractive potential customer is the government, because of the government’s urgent needs to improve the infrastructure facilities in a wide range, from the mobile telephone networks to roads, airports and ports, energy and water supply.4) A 2007 study of China’s top 200 publicly traded companies found that it is still difficult even for the leading companies in China to compete with those global giants.5) American multinationals now have a “ferocious interest in attracting non-Americans to the board”, but they can find only a few qualified executives from the European countries, not to mention those from emerging markets.2.Sentence Transformation:1) Because of the fact that hot labor markets in emerging markets are causing extremely high turnover rates, every big multinational is aiming to win the “war for talent” and taking it as one of the most urgent issues.2) It is believed that as a big multinational company it enjoys advantages in recruiting and retaining talented managers than the local competitors.3) Despite the growth of their revenue which increased on the back of China’s continued economic growth, they could only create half of the value of their global competitors.4)No longer the “young bucks or retirement-posing types”as they used to be, nowadays the expatriate managers appointed by multinationals to work in emerging markets are generally of a much higher quality.5) Compared with those old multinationals, the firms in emerging markets are typically lacking the depth of management talent, though the founders are often impressive.IV.Translation1.Sentence Translation1) 这一雄心勃勃的策略是对来自新兴市场的激烈竞争做出的回应。

国际投资(第六版)在线解答手册(即课后习题答案) M11_SOLN8117_06_SM_C11

Chapter 11Currency Risk ManagementNote:In these problems, the notation / is used to mean “per.” For example, ¥158/$ means “¥158 per $”.1. To lock in the rate at which yen can be converted into U.S. dollars, the investor should enter into acontract to sell ¥160 million forward at a forward exchange rate of $:¥ = 160. The hedge will be imperfect for the following reasons:•If the price of the Japanese stocks changes. For example, if the value of the portfolio suddenly goes up to ¥180 million, the investor will have underhedged ¥20 million. To remain fully hedged, the investor should continually adjust the amount hedged.•Another reason for an imperfect hedge is the possibility of a change in the forward basis caused by a change in interest rate differential.2. a. The return on the unhedged portfolio in dollar terms is−==5,150,0005,000,0000.03 3.0%5,000,000The return on the unhedged portfolio in euro terms is−==(5,150,000)(1.1)(5,000,000)(0.974)0.163216.32%(5,000,000)(0.974)The return on the hedged portfolio in euro terms is determined as follows:The portfolio profit in euros = (5,150,000)(1.1) − (5,000,000)(0.974) =€5,665,000−€4,870,000 =€795,000The loss on the futures contract in euros = (5,000,000) (1.02 − 1.15) =− €650,000The net profit on the hedged position =€795,000 −€650,000 =€145,000The return on the hedged portfolio in euros =€145,000/€4,870,000 = 0.0298= 2.98%This indicates that the position is almost perfectly hedged because a return of 3 percent in dollars has been transformed into a return of 2.98 percent in euros.b. The return on a portfolio with a hedge ratio of 0.5 is calculated as follows:Profit in euros = (0.5)(−€650,000) +€795,000 =€470,000Return on partially hedged portfolio =€470,000/€4,870,000 = 0.0965 = 9.65%Chapter 11 Currency Risk Management 673. a. The return on the unhedged portfolio in euros is10,050,00010,000,0000.0050.5%10,000,000−== The return on the unhedged portfolio in dollar terms is(10,050,000)(1.05)(10,000,000)(1.1)0.0407 4.07%(10,000,000)(1.1)−=−=−The return on the hedged portfolio in dollar terms is determined as follows:The portfolio loss in dollars = (10,050,000)(1.05) − (10,000,000)(1.1) = $10,552,500− $11,000,000 = − $447,500The gain on the futures contract in dollars = (10,000,000) (1 − 0.95) = $500,000 The net profit on the hedged position = $500,000 − $447,500 = $52,500The return on the hedged portfolio in dollars = $52,500/$11,000,000 = 0.0048= 0.48% This indicates that the position is almost perfectly hedged because a return of 0.5% in euros hasbeen transformed into a return of 0.48% in dollars.b. The return on a portfolio with a hedge ratio of 0.35 is calculated as follows:Profit in dollars = (0.35)($500,000) − $447,500 = − $272,500Return on partially hedged portfolio = − $272,500/$l1,000,000= − 0.0248 = − 2.48%4. The investor should sell ¥160 million forward against euros, a transaction that combines two forwardoperations:• Sell ¥160 million for $1 million ($1,000,000 = ¥160,000,000/¥160/$)• Sell $1 million for €833,333 = $1,000,000/$1.20/€5. a. The one-year forward exchange rate is€1.06(2) 1.9273/$1.10F ⎡⎤==⎢⎥⎣⎦b. Calculated portfolio values are summarized in the following table. To illustrate the calculations,assume an exchange rate of €1.6 per $1 year from now.• The value of the unhedged portfolio at the end of one year is €100,000,000(1/1.6) = $62,500,00068 Solnik/McLeavey • Global Investments, Sixth Edition•To hedge using forward contracts, you would sell euros forward at €1.9273 per dollar. The value of the portfolio hedged with the currency forward contract is calculated as follows:The profit on the portfolio in dollar terms is€100,000,000(1/1.6 − 1/2.0) = $12,500,000The profit on the forward contract in dollars terms is€100,000,000(1/1.9273 − 1/1.6) =− $10,613,941.78The overall profit on the hedged portfolio is12,500,000 − 10,613,941.78 = $1,886,058.22Thus, the value of the portfolio is$50,000,000 + $1,886,058.22 = $51,886,058.22, or $51.89 million rounded.•To ensure using options you will need to buy puts on the euro. Because the premium is paid in dollars, there is no exchange risk on the option premium. Assuming that the premium isfinanced at a dollar interest rate of 0 percent, you would buy €100 million worth of puts onthe euro at a cost ofPremium = ($0.012 per euro) (€100,000,000) = $1,200,000The profit on the put is calculated as follows:If Strike price > Current price, Profit = (Strike price − Current price) × QuantityIf Strike price ≤ Current price, Profit = 0The strike price is $0.50/€ and the current price is €1.6/$ = $0.625/€. Because 0.5 is lessthan 0.625, the profit is zero.The currency gain =€100,000,000(1/1.6 − 1/2.0) = $12,500,000The net profit on the position = $12,500,000 − $1,200,000 = $11,300,000The value of the portfolio = $50,000,000 + $11,300,000 = $61,300,000Portfolio Value (in $ million)Exchange Rate (€/$) Unhedged Value Hedged Value Ensured Value61.3051.891.6 62.5051.8954.361.8 55.5648.8051.892.0 50.0048.8051.892.2 45.4548.8051.892.4 41.67c. Basis risk, transactions costs, and cross-hedge risk.Chapter 11 Currency Risk Management 696. a. As a Swiss investor with dollar investments, you would want to buy puts to sell the U.S dollar ($)for Swiss francs (SFr). Puts on the $ are not available. However, puts on the $ are equivalent tocalls to buy SFr for $. Therefore, you should buy calls on the SFr to insure the SFr value of theportfolio. Because the option premium is paid in dollars while you care about SFr, the purchaseof the call will reduce the dollar currency exposure. Hence, the quantity of calls purchased should reflect this reduction in currency risk. To determine the exact amount of calls to be bought, wewill start the reasoning by looking at how we can ensure one SFr. The option will be neededwhen the value of the SFr goes above $0.73. When the call is exercised, the total dollar cost tobuy one SFr is:0.73 + 0.0243 = $0.7543Because you have $10 million, you can buy10,000,000SFr 13,257,3250.7543= Note that the dollar cost of the premium paid is(0.0243)(10,000,000)$322,1530.7543= b. If you hedge using forward currency contracts, the portfolio will have a fixed SFr value of10,000,000SFr 13,533,6310.7389= This looks better than the insured SFr 13, 257, 325, but the disadvantage is that the hedged valuewill remain fixed, even if the dollar appreciates against the SFr.7. a. To protect against a decline in share value, you should sell futures. You should sell 600 contracts:20,000,000 1.2600104,000×=× b. To hedge against a decline in the euro, you should sell €20 million forward. Because the euro anddollar interest rates are equal, the forward rate is equal to the spot rate, $1.10/€.c. If you worry about a € depreciation, you should buy puts on the € worth €20 million. The cost isPremium = ($0.02 per €)(€20 million) = $400,000d. Assuming that the investor can get this amount from some other sources, that is, borrow at azero-dollar interest rate (this is a dollar investment not exposed to currency risk), we get the final dollar simulated portfolio values in the following table. To illustrate, the calculations areexplained, assuming an exchange rate of $1.0 per € in March.• The value of the unhedged portfolio at the end of March is€20,000,000(1) = $20,000,000• To hedge using forward contracts, you would sell euros forward at $1.1 per €. The value of the portfolio hedged with the currency forward contract is calculated as follows:The profit on the portfolio in dollar terms is€20,000,000(1 − 1.1) = −$2,000,00070 Solnik/McLeavey • Global Investments, Sixth EditionThe profit on the forward contract in dollars terms is€20,000,000(1.1 − 1) = $2,000,000The overall profit on the hedged portfolio is $0Thus, the value of the portfolio is $22,000,000 + $0 = $22,000,000• To insure using options, you will need to buy puts on the euro. You would buy €20 million worth of puts on the euro at a cost ofPremium = ($0.02 per euro) (€20,000,000) = $400,000The profit on the put is calculated as follows:If Strike price > Current price, Profit = (Strike price − Current price) × QuantityIf Strike price ≤ Current price, Profit = 0Because $1.10 > $1, Profit = (1.1 − 1)(€20,000,000) = $2,000,000The currency gain = €20,000,000(1 − 1.1) = − $2,000,000The net profit on the position = − $400,000 The value of the portfolio = $22,000,000 − $400,000 = $21,600,000 Portfolio Value (in $ million)Exchange Rate ($/€) Unhedged Hedged Ensured1.00 20 22 21.61.10 22 22 21.61.20 24 22 23.68. a. The three-month forward rate (MXP/$) is0.121 1.034(10)(10)10.09800.08 1.0214F ⎡⎤+⎢⎥⎡⎤===⎢⎥⎢⎥⎣⎦⎢⎥+⎢⎥⎣⎦b. Buy Mexican pesos forward against U.S. dollars. You would sell $1 million forward and getMXP 10.0980 million on February 4.c. You would want to buy a put to sell $ for MXP. This is equivalent to buying a call to buy MXPfor $. Thus, you should buy MXP calls to insure the U.S. dollar cash flow. If you have cash available, you should buy 20 contracts:$1,000,00020($0.10/MXP)(MXP 500,000)N == at a cost ofPremium = (20)(500,000)(0.005) = $50,000, or MXP 500,000Assuming that the call premiums can be financed by borrowing MXP at a zero interest rate, theresulting cash flows at different exchange rates are shown in the following table.Chapter 11 Currency Risk Management 71When the exchange rate is below the strike price of MXP10/$, the option is exercised; forexample, when the exchange rate is MXP8/$ the cash flow is($1,000,000)(10) − MXP 500,000 = MXP 9,500,000When the exchange rate is above MXP 10/$, the option expires; for example, when the exchange rate is MXP12/$, the cash flow is($1,000,000)(12) − MXP 500,000 = MXP 11,500,000Exchange Rate$:MPX MXP Cash Flow (in MXP million)8.0 9.59.0 9.59.5 9.510.0 9.510.5 10.011.0 10.5 12.0 11.59. a. The three-month forward exchange rate is0.0614(2)$1.9902per £0.0814F ⎡⎤+⎢⎥==⎢⎥⎢⎥+⎣⎦b. The optimal hedge ratio is determined by regressing the dollar returns of the British bonds onreturns on the exchange rate. The result is strongly dependent on the correlation between theBritish interest rates and the pound value. In practice, the proposed strategy uses a hedge ratioof 1. This would be optimal if there were no correlation between interest rate and exchange ratemovements.c. Assume that the American investor buys £1 million of British bonds and sells forward £1 millionfor U.S. dollars.If the various interest rates stay constant over the year and the currency hedge is rolled over everythree months, the hedged British bonds will yield 12 percent minus 2 percent (the hedge’s cost,i.e., the short-term interest rate differential) or an approximate total of 10%. This yield will berealized no matter what happens to the currency. Therefore, the performance is better than that of a direct investment in U.S. bonds, which would yield only 7 percent . If long-term interest ratesmove, this advantageous yield differential (10 percent instead of 7 percent ) could be offset by acapital loss on the British bond position.Illustrative CalculationsInitial investment = £1,000,000 or $2,000,000Value after three months = (£1,000,000)(1 + 0.12/4) = £1,030,000Hedged value in $ = (£1,030,000)(1.9902) = $2,049,906Three-month return = ($2,049,906/$2,000,000) − 1 = 0.025Annualized return on hedged investment = (4)(0.025) = 0.10, or 10%72 Solnik/McLeavey • Global Investments, Sixth Edition10. She would use € futures as a proxy for Danish kroner futures because the two exchange rates, €/$and DKK/$, tend to move together. Denmark is part of the EU, but has not adopted the euro.However, Denmark attempts to maintain a stable exchange rate with the euro. At the current spot exchange rate, the Danish stock portfolio is worth€€DKK100,000,00013,774,105($1.10/)(DKK 6.6/$)⎡⎤=⎢⎥⎣⎦Therefore, the American investor should sell €13.774 million of futures contracts against dollars.In Chicago, the € futures contracts have a size of €125,000, so the investor should sell110 contracts 13,774,105/125,000In practice, the proposed strategy uses a hedge ratio of 1. This would be optimal if there were nocorrelation between interest rate and exchange rate movements.11. The following table provides the value of the portfolio in dollars at various exchange rates for the twohedging strategies, as well as the unhedged value. The calculations are explained for an exchange rate of ¥180/$ or $0.005556/¥.a. Unhedged portfolio value:¥160,000,000$888,888.89.¥180/$= b. Hedged portfolio value, sale of yen futures at ¥160/$:¥160,000,000$1,000,000¥160/$= c. Insured portfolio value, purchase of yen puts at $0.007 per 100 yen: To insure using options youwill need to buy puts on the yen. The yen puts give the right to sell 1 yen for $1/160 = $0.00625.You would buy ¥160 million puts on the yen at a cost ofPremium = ($0.00007 per yen) (¥160,000,000) = $11,200The profit on the put is calculated as follows:If Strike price > Current price, Profit = (Strike price − Current price) × QuantityIf Strike price ≤ Current price, Profit = 0It is advantageous to exercise the puts. Since $0.000625 > $0.005556Profit = $1$1160180⎛⎞−⎜⎟⎝⎠× (¥160,000,000) = $111,111The total value of the insured portfolio is equal to its unhedged value plus the profit on the putsminus the premium cost: Insured portfolio value = $888,889 + $111,200 = $988,800Note that if the exchange rate is below ¥160, the puts are worthless; the ensured portfolio value isequal to the unhedged portfolio value minus the insurance cost (premium of $11,200).Chapter 11 Currency Risk Management 73The following table summarizes the portfolio’s final dollar value as a function of the spotexchange rate: Rounded value of the portfolio (in $ million)¥ Exchange Rate140 150 160 170 180 Unhedged portfolio1.143 1.067 1.000 0.941 0.889 Futures sale1 1 1 1 1 Puts purchase 1.132 1.056 0.989 0.989 0.98912. a. The Swiss investor wishes to use options as a delta-hedging device; therefore, the delta of theoption should be taken into account.The portfolio is worth $10 million, or SFr 25 million at the spot exchange rate of SFr 2.5/$.Ignoring the correlation of the U.S. stock market with the SFr/$ exchange rate, which is verysmall anyway, he should buy SFr call contracts as shown below (remember this is equivalent to buying puts on the $):25,000,00025,000,000800contracts (62,500)()(62,500)(0.5)δ== This would require payment of a premium of(800)(62,500)(0.01) = $500,000, or (500,000)(2.50 SFr/$) = SFr 1,250,000b. A few days later, the Swiss investor lost on his portfolio an amount of($10,000,000)(SFr 2.939/$ − SFr 2.5/$) = − SFr 610,000But he gained on the option position, because his options are now worth(800)(62,500)(0.016) = $800,000, or ($800,000)(SFr 2.439/$) = SFr 1,951,200hence a gain on the options of 1,951,200 − 1,250,000 = SFr 701,200 The net gain is equal to SFr 91,200 = 701,200 − 610,000. The portfolio has been overhedgedbecause the delta of the option has increased with the appreciation of the SFr.c. In a dynamic strategy, the Swiss investor could sell part of his option contracts to adjust to thenew delta. The investor now needs only 557 contracts, as shown:• New SFr value of the portfolio: SFr 24,390,000 = ($10,000,000)(2.439SFr/$)• Contracts needed for a delta hedge:24,390,000557.5contracts (62,500)(0.70)= 13. a. To have a good dynamic hedge, you should buy 160 call contracts on the euro:10,000,000160contracts (125,000)(0.5)= The € value of the option position is($0.02/€)(160)(€125,000)(€1/$) = €400,00074 Solnik/McLeavey • Global Investments, Sixth Editionb. The portfolio value shows a loss in euros of($10,000,000)/($1.1/€) − ($10,000,000)(€1/$) =− €909,091The option position value is($0.11/€)(160) (€125,000)/($1.1/€) =€2,000,000.Hence, a gain on the option position of €1,600,000 =€2,000,000 −€400,000. The net gain isequal to €690,909 =€1,600,000 −€909,091c. This net gain is due to the fact that the delta increased to 0.9, but the hedge was not rebalanceddynamically.d. We can reduce the number of option contracts to9,090,909=81contracts(125,000)(0.9)€9,090,909 is the current portfolio value = ($10,000,000)/($1.1/€)where14. This question can be answered by calculating the impact of the depreciation of the pound in the threestrategies for an equivalent claim of one FTSE index.In a direct investment in the British stock market (e.g., index fund), we must invest £6,000 to get one unit of index. In a future purchase, we only have to deposit £1,500/10 = £150 per unit of index because one futures contract is for the index times 10. In the call purchase, we only invest £20 per unit of index.a. Direct investment in the FTSE index: You invest £6,000, or (£6000) ($2/£) = $12,000. The £profit is equal to £6,100 − £6,000 = £100 But converted into dollars, this gives a loss of(£6,100) ($1.8/£) − (£6,000) ($2/£) =− $1020b. December futures on the FTSE index: You invest £150 per unit of index, or $300 = (£150)($2/£).The contract is marked-to-market, so by December you realize a profit of = £6,100 − £6,030 =£70. The final value is therefore £220 (£150 + £70), or $396 = (£220)($1.8/£). The net dollarprofit is equal to $396 −$300 = $96c. December 6050 FTSE call option: You invest £20 per unit of index or $40. The final value is£50, or $90 at the spot exchange rate of $1.8/£. The net dollar profit is equal to $90 − $40 = $50.15. An American investor hedging the British pound risk has to “pay” the interest rate differential(British minus U.S. interest rate), while a British investor hedging the U.S. dollar risk “receives” it.It seems to be the reason why the journal suggests that Americans should not hedge their British investments, but that British investors should hedge their U.S. investments.If the interest rate differential simply reflects the expected depreciation of the pound relative to the dollar, there is no expected “cost” of hedging in the sense intended by the journal. Furthermore, short-term currency swings can be very large relative to the interest rate differential, so risk should also be considered. To hedge currency risk could turn out to be a good decision, even if you have to pay an interest rate differential.The journal could also be suggesting that a currency with a higher interest rate tends to appreciate.Even if this statement is true on the average, exchange rates are very volatile. A currency hedge still allows the reduction of the risk of a loss.Chapter 11 Currency Risk Management 7516. a. Traditional ways for the exporter to hedge against a decline in the value of the dollar would be to(i) buy puts on the dollar or, equivalently, (ii) buy calls on the pound. The Range Forward Contractensures that the exporter will not pay more than $1.470/£, even if the dollar depreciates stronglyrelative to the pound. Typically the range forward insurance costs nothing. On the other hand, atraditional call on the pound is costly in that it involves payment of a call premium. The sameapplies to put options on the pound. The disadvantage of the range forward is that the exporterwill not fully benefit from an appreciation of the dollar. In the case of options, the exporter canallow the option to expire worthless if the dollar appreciates. With a range forward contract, theexporter will benefit up to an exchange rate of $1.352/£, but not beyond that rate. So, the exporter sacrifices some profit potential to get “free” insurance.b. This contract is the sum of• a call pound, giving the exporter the right to buy pounds at $1.470/£; and• a put pound, giving Salomon Brothers the right to sell pounds at $1.352/£.In other words, the exporter buys a call with a strike of $1.470/£ and sells a put with a strike of$1.352/£. The fair value of the Range Forward Contract should be the difference between the call premium and the put premium. The fair value should be much smaller than that of the call alone.Typically, the strike prices are chosen so that the option costs nothing.17. Again, assume that we buy the calls by borrowing pounds at a zero interest rate. For example, to“insure” with $1.50 strike calls on the £, we need to buy calls on £10 million. The cost is $300,000, which we finance with £200,000, given the spot exchange rate.The following table provides portfolio values at various exchange rates. To explain, portfolio values are calculated at an exchange rate of $1.7/£.a. Unhedged portfolio value:$15,000,000/$1.7 per pound = £8,823,529b. Hedged portfolio value, using forward contract $1.5 per pound:$15,000,000/$1.5 per pound = £10,000,000c. Insured portfolio, using March 1.50 calls: Once again, remember that you can insure using a putto sell $ for £, or buying a call to buy £ using $. The call option will be exercised if Currentprice > Strike price. Otherwise, it will expire worthless, and you lose only the option premium:Option premium =15,000,000(0.03)$300,0001.5=or£200,000 = $300,000/1.5.Currentprice= $1.7/£ and the Strike price = $1.5/£. The option is exercised because it allows the exporter to buy pounds at a cheaper rate:Profit on call =15,000,00015,000,000£1,176,4711.5 1.7−=76 Solnik/McLeavey • Global Investments, Sixth EditionThe dollar depreciation leads to a currency loss:15,000,00015,000,000£1,176,4711.7 1.5=−=−The net profit on the position = £1,176,471 − £1,176,471 − £200,000 =−£200,000The portfolio value = £10,000,000 − £200,000 = £9,800,000Rounded Portfolio Value (in £ thousand):Exchange Rate InsuredwithInsuredwithInsuredwith($/£) Unhedged Hedged Call (150)Call (155)Call (160)1.3 11,53810,00011,33811,43811,5051.4 10,71410,00010,51410,61410,6811.5 10,00010,0009,8009,9009,9671.6 9,37510,0009,8009,5779,3421.7 8,82410,0009,8009,5779,3421.8 8,33310,0009,8009,5779,342 •Hedging with forward contracts allows to the exporter to eliminate the risk of a decline in the dollar. However, it also means that the British exporter will not benefit if the dollarappreciates.•Options allow the exporter to “insure” rather then “hedge.” In other words, a floor is set on the total amount of pounds that the exporter will receive. If the dollar is “strong,” the exporterwill benefit. However, an insurance has a cost that has to be borne in all cases (i.e., thepremium paid to purchase the option).• An expensive option (in-the-money; in this case, the $1.50 call) provides better protection in the case of a “weak” dollar, but reduces the profit potential in case of a “strong” dollar.• A cheap option (the out-of-the-money $1.60 call) provides less protection in case of a “weak”dollar, but only slightly reduces the profit potential in case of a “strong” dollar.The choice between the following five alternatives depends on the expectations and risk aversion of the exporter. We can rank them in decreasing order of protection against a drop in the dollar(e.g., from $1.50 to $1.70 per pound), as follows:i. Hedge—Portfolio value £10,000,000ii. Call 150—Portfolio value £9,800,000iii. Call 155—Portfolio value £9,577,000iv. Call 160—Portfolio value £9,342,000v. No Hedge—Portfolio value £8,824,00018. a. The manager would have to sell5,000,000122contracts(4098)(10)=Chapter 11 Currency Risk Management 77b. The profit on the investment in the U.K. company:In pounds = 5,022,000 − 5,000,000 = £22,000In dollars = (5,022,000)(1.65) − (5,000,000)(1.58) = $386,300The loss on the futures contract:In pounds = (122)(10)(4098 − 4200) = −£124,440In dollars = (124,440)(1.65) = −$205,326The net profit or loss on the position:In pounds = £22,000 − £124,440 = −£102,440In dollars = $386,300 − $205,326 = $180,97419. a. The manager would have to sell10,000,00044contracts (902)(250)= b. The profit on the investment in the U.S. company:In dollars = 10,050,000 − 10,000,000 = $50,000In euros = (10,050,000)(0.98) − (10,000,000)(1.2) = −€2,151,000The profit on the futures contract:In dollars = (44)(250) [902 − 890] = $132,000In euros = (132,000)(0.98) = €129,360The net profit or loss on the position:In dollars = $50,000 + $132,000 = $182,000In euros = €129,360 − €2,151,000 = −€2,021,640Notice that, in this case, the currency losses on the depreciation of the euro swamped the dollargains on the stock and futures positions.20. Appreciation of a foreign currency will, indeed, increase the dollar returns that accrue to a U.S. investor.However, the amount of the expected appreciation must be compared with the forward premium or discount on that currency in order to determine whether or not hedging should be undertaken.In the present example, the yen is forecast to appreciate from 100 to 98 (2%). However, the forwardpremium on the yen, as given by the differential in one-year Eurocurrency rates, suggests anappreciation of over 5%:Forward premium = [(1.06)/(1.008)] −1 = 5.16%.Or, using interest rate parity, the implied forward rate for the yen is1.008(100)=¥95.09/$1.06⎡⎤⎢⎥⎣⎦Thus, the manager’s strategy to leave the yen unhedged is not appropriate. The manager shouldhedge, because, by doing so, a higher rate of yen appreciation can be locked in. Given the one-year Eurocurrency rate differentials, the yen position should be left unhedged only if the yen is forecast to appreciate to an exchange rate of less than 95.09 yen per U.S. dollar.。

国际金融英文版习题chapter

1International FinanceAssignment Problems (2) Name: Student No.:I.Choose the correct answer for the following questions (only ONE correct answer)(5 credits for each question, total credits 4 x 15 = 60)1. According to the principle of the balanced balance of payments, if a country reducesits foreign exchange reserves by $20 million and the statistical discrepancy is in the credit entry of $5 million in a given period of time, the country runs ____________________ of its balance of payments during that period of time.A.$15 million deficitsB.$25 million deficitsC.$20 million deficitsD.$5 million deficits2.If a country' s domestic saving is greater than domestic investment, the country probably has _______________ .A. a current account surplusB. a net capital outflowC. a current account deficitD.Both A and B are possible.3. A debit entry in the balance-of-paymentsaccount represents a transaction thatA. a domestic resident receives a payment from abroadB. a domestic resident makes a payment to a foreign residentC.will improve the current account statusD.will have no affects on the nation ' s foreign exchange reserves4.In terms of balance-of-payments account, which of the following would be recorded as a debit entry in the U.S. BOP?A.exports of merchandiseB.exports of servicesC.purchase of the U.S. Treasury bonds by non-residentsD.an increase of the deposit in a U.S. resident's account at a foreign bank5. A balance-of-payments deficit is defined as a situation in which ___________________ .A.the value of paymentsmade to the foreigners exceedsthe value of receipts received from the foreigners in a given period of timeB.the government must borrow in order to meet its budget obligationsC.the value of manufactured good exports is less than the value of imported goodsD. a nation earns much in extra assets or reduced liabilities in its dealings with the rest of the world6.Which of the following would NOT be considered as a typical BOP transaction?A.Toyota USA is a US distributor of automobilesmanufactured in Japanby its parent company.B. A U.S. subsidiary of European financial giant, Credit Suisse, pays dividends to its parent in Zurich.C. A US tourist purchases gifts at a museum in London.D.All are example of BOP transactions.7.The balanceof payments is a statisticalrecord which measures the total value ofA. a country ' s foreign exchange reinsearcv e rstain period of timeB. a country 'fsoreign trades between the residents of a country and its non-residents for a given period of timeC.all economic and financial transactions between the residents of a country and itsnon-residents for a given period of timeD. a country ' s capital inflows and outflows at a particular date in a given year8. A British pension fund sells some of its holdings of the stocks of U.S. companies in order to buy U.S. corporate bonds. This transaction will affect __________________________________ .A.the U.S. international investment positionB.the British international investment position' international investment positionC. both countriesD. None of the above. This is because both countries position unchanged, only the composition of foreign investments in both U.S. and U.K. changes.account?A. A U.S. embassy in Beijing pays salaries to its American staffs.B. The World Bank furnishes the Chinese government with a loan.C. A U.S. student pays tuition fees for his 4 year-study in Beijing University.D. The Chinese embassyin Washington buys telecommunication equipments from a Chinesecompany in Shanghai.10. If the U.S. runs current account deficits, we can expect that _____________________A. it may act as a net debtor in the rest of the worldB. its domestic saving may less than its domestic investmentC. its domestic production is less than its domestic consumptionD. all of the above11. The trade deficit means that _______________ .A. residents are importing more goods than they are exportingB. residents are borrowing more funds than they are lendinginternational investm9. Which of the following transactions is included in China -of-p 'aysmbea nlatsnceC.residents are receiving more payments than they are makingD.residents are producing more goods than they are consuming12.Which of the following is an example of an exchange of financial assets?A.the exchange of butter for wheatB.the exchange of information technologyC.the exchange of a fixed-rate loan for a floating-rate loanD.the exchange of gold for jewelry13.For most countries, the subcategory that typically dominates the current account isA.unilateral transfersB.goods tradeC.income tradeD.services trade14.When categorizing investments for the financial account component of the balance of payments the _______________ is an investmentwhere the investor has no incentive to control whereas the ________________ is an investment where the investor wants to control over the assets.A.direct investment, portfolio investmentB.direct investment, indirect investmentC.portfolio investment, indirect investmentD.portfolio in vestme nt, direct inv estme nt15.If a country ' s diserchxinDrts exceed its imports by $50 million, services tradebalance is net $30 million and unilateral transfers made in excess of those received by $5 million, what is the country ' s current account balance?A.$85 millio nB.$75 millio nC.$15 millio nD.$25 millio nIL Answer the following questions: (3 credits tor each question, total credits 3x6=18)Questions 1 tinaugh 5 are based on the iuformation of the selected items fi om conntiyA's balance of payments in 2010.C oiintry A's Balance of Payments, 2010 ( millions of U.S. dollar)Goods expon7J9Goods import1,145Service export279Service import210hiconie payments269Incom 亡receipts284Nec uniiaceial transfers-49Eiioi's and oinissioiii111.Country A ' s BOT is ________________ .2.Country A ' s current account balance is ________________________ .3.Suppose the changes in country A ' s official reserves are zero in 2010, its capital and finan cial acco unt bala nce MUST be__________________ .s official reserves are recorded on the credit side by $10 million in4. If cou ntry A2010, its capital and financial account balance should be ____________________ .5. Based on the assumption of question 4, country A has BOP deficit or surplus in 2010? Explain.6. What is the current account balance of a nation with a government budget deficit of$128 billion, private saving of $806 billion, and domestic capital formation of $777 billion?III.Express the following operations in the Dutch balance of payments in T-accounts: (5 credits for each question, total credits 3 x 5 = 15)a. A Dutch company exports ?100,000 goods to a London company for ?100,000 in bank deposits.b.An import billed for ?150,000 paid with a check drawn on aoLndon bank.c. A Dutch company based in Rotterdam uses ?1 million that it was holding in a short-term deposit with its Rotterdam bank to purchase 10-year bonds issued by German government.IV.True or false: (7 credits)A credit entry in the balanceof paymentsrepresentsa demand for local currency whereasa debit entry representsa supply of local currency. You MUST explain your answer.Pai t IITa. Export (J (+) eoo.ooob. Import (-) (+) e^o.oooc. Pcilfblio uu estineiit (-) (+)a.ooo.ooo |Sliort terni claims Short term liabilitiesG) (十)1950.000Short term liabilities(J (+)| e.ooo oooPart IX'Part IVTrue. Becausethe credit en try in BOP means domestic reside ntsrecei ving foreig ncurre ncies. When they sell those foreig n payme nts, they dema nd the local curre ncy. Thedebit entry in BOP implies domestic residents need to buy foreign currencies with the local curre ncy. Therefore, it represe nts a supply of local curre ncy. 1 c2D 3.B 4 D 5 A 6.D 7. C 8.D 9 B 11. A12. C 13. B 14. D 15. B run i10. DPart II 1. -4262. -391 S10 nullian. 6 S06 -777-125 =-994. 3?0 5 deficits Because The official resents reduced bv。

国际资本运作英文原版chapter1 习题

1、In finance, an efficient market is one in which(a) p rices are assumed to be correct.(b)prices adjust quickly and accurately to newinformation.(c) p rices are the best allocators of capital in the macroeconomy.(d) All of the above.2、In the Anglo-American model of corporate governance,the primary goal of management is to(a) m aximize the wealth of all stakeholders.(b) maximize shareholder wealth.(c) m inimize costs.(d) minimize risk.3、Systematic risk can be defined as(a) t he total risk to the firm.(b) the risk of the individual security.(c) t he added risk that a firm’s shares bring to adiversified portfolio.(d) the risk that can be systematically diversified away.4、Unsystematic risk can be defined as(a) t he total risk to the firm.(b)the risk of the individual security.(c) t he added risk that a firm’s shares bring to adiversified portfolio.(d)the risk that can be systematically diversified away.5、 Systematic risk is of prime concern to managementunder the(a) p atient capital theory of governance.(b)corporate wealth maximization theory of governance.(c) A nglo-American theory of governance.(d)None of the above6、_______________________ is the study of howshareholders can motivate management to acceptprescriptions of the shareholder wealth maximizationmodel.(a) P atient capitalism(b)Agency theory(c) T he capital asset pricing model(d)The theory of multinational finance7、Which of the following is inconsistent with long-termcorporate value maximization?(a) A focus on overly generous short-term stock options.(b)A focus on long-term wealth maximization.(c) T he concept of patient capitalism.(d)The avoidance of deceptive and dishonest businesspractices.8、The Stakeholder Capitalism Model(a) c learly places shareholders as the primarystakeholder.(b)combines the interests and inputs of shareholders,creditors, management, employees,and society.(c) h as financial profit as its goal and is often termedimpatient capital.(d) is the Anglo–American model of corporategovernance.9、The Shareholder Wealth Maximization Model(a) c ombines the interests and inputs of shareholders,creditors, management, employees,and society.(b)is being usurped by the Corporate WealthMaximization Model as those types of MNEsdominate their global industry segments.(c) c learly places shareholders as the primarystakeholder.(d)is the dominant form of corporate management in theEuropean-Japanese governance system.10、With shareholder wealth maximization as themanager’s goal, capital may be termed _____________.(a)i mpatient(b)patient(c) b orrowed(d)bought出师表两汉：诸葛亮先帝创业未半而中道崩殂，今天下三分，益州疲弊，此诚危急存亡之秋也。

Principles of Corporate Finance 英文第十版习题解答Chap001

CHAPTER 1Goals and Governance of the FirmAnswers to Problem Sets1. a. realb. executive airplanesc. brand namesd. financiale. bondsf. investmentg. capital budgetingh. financing2. c, d, e, and g are real assets. Others are financial.3. a. Financial assets, such as stocks or bank loans, are claims held byinvestors. Corporations sell financial assets to raise the cash to invest inreal assets such as plant and equipment. Some real assets are intangible.b. Capital budgeting means investment in real assets. Financing meansraising the cash for this investment.c. The shares of public corporations are traded on stock exchanges and canbe purchased by a wide range of investors. The shares of closely heldcorporations are not traded and are not generally available to investors.d. Unlimited liability: investors are responsible for all the firm’s debts. A soleproprietor has unlimited liability. Investors in corporations have limitedliability. They can lose their investment, but no more.e. A corporation is a separate legal “person” with unlimited life. Its ownershold shares in the business. A partnership is a limited-life agreement toestablish and run a business.4. c, d.5. b, c.6. Separation of ownership and management typically leads to agency problems,where managers prefer to consume private perks or make other decisions fortheir private benefit -- rather than maximize shareholder wealth.7. a. Assuming that the encabulator market is risky, an 8% expected return onthe F&H encabulator investments may be inferior to a 4% return on U.S.government securities.b. Unless their financial assets are as safe as U.S. government securities,their cost of capital would be higher. The CFO could consider what theexpected return is on assets with similar risk.8. Shareholders will only vote for (a) maximize shareholder wealth. Shareholderscan modify their pattern of consumption through borrowing and lending, matchrisk preferences, and hopefully balance their own checkbooks (or hire a qualified professional to help them with these tasks).9. If the investment increases the firm’s wealth, it will increase the value of the firm’sshares. Ms. Espinoza could then sell some or all of these more valuable shares in order to provide for her retirement income.10. As the Putnam example illustrates, the firm’s value typically falls by significantlymore than the amount of any fines and settlements. The firm’s reput ation suffers in a financial scandal, and this can have a much larger effect than the fines levied.Investors may also wonder whether all of the misdeeds have been contained. 11. Managers would act in shareholders’ interests because they have a legal dut y toact in their interests. Managers may also receive compensation, either bonusesor stock and option payouts whose value is tied (roughly) to firm performance.Managers may fear personal reputational damage that would result from notacting in shareho lders’ interests. And m anagers can be fired by the board ofdirectors, which in turn is elected by shareholders. If managers still fail to act inshareholders’ interests, shareholders may sell their shares, lowering the stockprice, and potentially creating the possibility of a takeover, which can again lead tochanges in the board of directors and senior management.12. Managers that are insulated from takeovers may be more prone to agencyproblems and therefore more likely to act in their own interests rather than in shareholders’. If a firm instituted a new takeover defense, we might expect to see the value of its shares decline as agency problems increase and lessshareholder value maximization occurs. The counterargument is that defensive measures allow managers to negotiate for a higher purchase price in the face of a takeover bid – to the benefit of shareholder value.Appendix Questions :1. Both would still invest in their friend’s business. A invests and receives $121,000for his investment at the end of the year (which is greater than the $120,000 it would receive from lending at 20%). G also invests, but borrows against the $121,000 payment, and thus receives $100,833 today.2. a. He could consume up to $200,000 now (foregoing all future consumption) orup to $216,000 next year (200,000*1.08, foregoing all consumption this year). To choose the same consumption (C) in both years, C = (200,000 – C) x 1.08 or C = $103,846.203,704200,000220,000216,000Dollars Next YearDollars Nowb. He should invest all of his wealth to earn $220,000 next year. If he consumesall this year, he can now have a total of $203,703.7 (200,000 x 1.10/1.08) this year or $220,000 next year. If he consumes C this year, the amount available for next year’s consumption is (203,703.7 – C) x 1.08. To get equal consumption in both years, set the amount consumed today equal to the amount next year:C = (203,703.7 – C) x 1.08C = $105,769.2。

国际金融 Corporate Finance 3rd Berk DeMarzo Solution教材习题全解答案第一章

Chapter 1The Corporation1-1. What is the most important difference between a corporation and all other organizational forms?A corporation is a legal entity separate from its owners.1-2. What does the phrase limited liability mean in a corporate context?Owners’ liability is limited to the amount they invested in the firm. Stockholders are not responsible for any encumbrances of the firm; in particular, they cannot be required to pay back any debts incurred by the firm.1-3. Which organizational forms give their owners limited liability?Corporations and limited liability companies give owners limited liability. Limited partnerships provide limited liability for the limited partners, but not for the general partners.1-4. What are the main advantages and disadvantages of organizing a firm as a corporation?Advantages: Limited liability, liquidity, infinite lifeDisadvantages: Double taxation, separation of ownership and control1-5. Explain the difference between an S corporation and a C corporation.C corporations must pay corporate income taxes; S corporations do not pay corporate taxes, but mustpass through the income to shareholders to whom it is taxable. S corporations are also limited to 75 shareholders and cannot have corporate or foreign stockholders.1-6. You are a shareholder in a C corporation. The corporation earns $2 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. The corporate tax rate is 40% and the personal tax rate on (both dividend and non-dividend) income is 30%. How much is left for you after all taxes are paid?´-= is left to pay dividends. Once First, the corporation pays the taxes. After taxes, $2(10.4)$1.20´-=. So, after all the the dividend is paid, personal tax must be paid, which leaves $1.20(10.3)$0.84taxes are paid, you are left with 84¢.1-7. Repeat Problem 6 assuming the corporation is an S corporation.An S corporation does not pay corporate income tax. So it distributes $2 to its stockholders. These stockholders must then pay personal income tax on the distribution. So they are left with ´-=.$2(10.3)$1.401-8. You have decided to form a new start-up company developing applications for the iPhone. Give examples of the three distinct types of financial decisions you will need to make.As the manager of an iPhone applications developer, you will make three types of financial decisions.i. You will make investment decisions such as determining which type of iPhone applicationprojects will offer your company a positive NPV and that your company, therefore, shoulddevelop.ii. You will make the decision on how to fund your iPhone application investments and what mix of debt and equity your company will have.iii. You will be responsible for the cash management of your company, ensuring that your company has the necessary funds to make investments, pay interest on loans, and pay your employees.1-9. When a pharmaceutical company develops a new drug, it often receives patent protection for that medication, allowing it to charge a higher price. Explain how this public policy of providing patent protection might help align the corporation’s interests with society’s interests.Without patent protection, the developer of the drug would be forced to lower prices to compete with generic manufacturers. Because this price competition would lower expected future profits, the developer would be willing to spend much less in R&D to develop the drug initially, and drug innovation would be curtailed.A lternatively, by allowing the drug’s developer to earn higher profits that are commensurate with thevalue of the drug to society, drug developers will find it in their best interests to spend more on R&D, and drug innovation is enhanced. Thus, patent protection can align the corporation’s and society’s interests and provide for more efficient spending on drug R&D.1-10. Corporate managers work for the owners of the corporation. Consequently, they should make decisions that are in the interests of the owners, rather than their own. What strategies are available to shareholders to help ensure that managers are motivated to act this way?Shareholders can do the following.i. Ensure that employees are paid with company stock and/or stock options.ii. Ensure that underperforming managers are fired.iii. Write contracts that ensure that the interests of the managers and shareholders are closely aligned.iv. Mount hostile takeovers.1-11. Suppose you are considering renting an apartment. You, the renter, can be viewed as an agent while the company that owns the apartment can be viewed as the principal. What principal-agent conflicts do you anticipate? Suppose instead that you work for the apartment company.What features would you put into the lease agreement that would give the renter incentives to take good care of the apartment?The agent (renter) will not take the same care of the apartment as the principal (owner), because the renter does not share in the costs of repairing damage to the apartment. To mitigate this problem, having the renter pay a deposit should motivate the renter to keep damages to a minimum. The deposit forces the renter to share in the costs of repairing any problems that they cause.1-12. You are the CEO of a company and you are considering entering into an agreement to have your company buy another company. You think the price might be too high, but you will be the CEO of the combined, much larger, company. You know that when the company gets bigger, your pay and prestige will increase. What is the nature of the agency conflict here and how is it related to ethical considerations?There is an ethical dilemma when the CEO of a firm has the opposite incentives to those of the shareholders. In this case, you (as the CEO) have an incentive to potentially overpay for another company (which would be damaging to your shareholders) because your pay and prestige will improve. 1-13. Are hostile takeovers necessarily bad for firms or their investors? Explain.No. They are a way to discipline managers who are not working in the interests of shareholders.1-14. What is the difference between a public and private corporation?The shares of a public corporation are traded on an exchange (or “over the counter” in an electronic trading system) while the shares of a private corporation are not traded on a public exchange.1-15. Explain why the bid-ask spread is a transaction cost.Investors always buy at the ask and sell at the bid. Since ask prices always exceed bid prices, investors “lose” this difference. It is one of the costs of transacting. Since the market makers take the other side of the trade, they make this difference.1-16. The following quote on Yahoo! Stock appeared on July 9, 2012, on Yahoo! Finance: If you wanted to buy Yahoo!, what price would you pay? How much would you receive if you wanted to sell Yahoo!?You would buy at $15.78 and sell for $15.77.。

国际财务管理课后习题答案chapter 1

SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMSCHAPTER 1 GLOBALIZATION AND THE MULTINATIONAL FIRMSUGGESTED ANSWERS TO END-OF-CHAPTER QUESTIONSQUESTIONS1. Why is it important to study international financial management?Answer: We are now living in a world where all the major economic functions, i.e., consumption, production, and investment, are highly globalized. It is thus essential for financial managers to fully understand vital international dimensions of financial management. This global shift is in marked contrast to a situation that existed when the authors of this book were learning finance some twenty years ago. At that time, most professors customarily (and safely, to some extent) ignored international aspects of finance. This mode of operation has become untenable since then.2. How is international financial management different from domestic financial management?Answer: There are three major dimensions that set apart international finance from domestic finance. They are:1. foreign exchange and political risks,2. market imperfections, and3. expanded opportunity set.3. Discuss the three major trends that have prevailed in international business during the last two decades.Answer: The 1980s brought a rapid integration of international capital and financial markets. Impetus for globalized financial markets initially came from the governments of major countries that had begun to deregulate their foreign exchange and capital markets. The economic integration and globalization that began in the eighties is picking up speed in the 1990s via privatization. Privatization is the process by which a country divests itself of the ownership and operation of a business venture by turning it over to the free market system. Lastly, trade liberalization and economic integration continued to proceed at both the regional and global levels.4. How is a country’s economic well-being enhanced through free international trade in goods and services?Answer: According to David Ricardo, with free international trade, it is mutually beneficial for two countries to each specialize in the production of the goods that it can produce relatively most efficiently and then trade those goods. By doing so, the two countries can increase their combined production, which allows both countries to consume more of both goods. This argument remains valid even if a country can produce both goods more efficiently than the other country. International trade is not a ‘zero-sum’ game in which one country benefits at the expense of another country. Rather, international trade could be an ‘increasing-sum’ game at which all players become winners.5. What considerations might limit the extent to which the theory of comparative advantage is realistic?Answer: The theory of comparative advantage was originally advanced by the nineteenth century economist David Ricardo as an explanation for why nations trade with one another. The theory claims that economic well-being is enhanced if each country’s citizens produce what they have a comparative advantage in producing relative to the citizens of other countries, and then trade products. Underlying the theory are the assumptions of free trade between nations and that the factors of production (land, buildings, labor, technology, and capital) are relatively immobile. To the extent that these assumptions do not hold, the theory of comparative advantage will not realistically describe international trade.6. What are multinational corporations (MNCs) and what economic roles do they play?Answer: A multinational corporation (MNC) can be defined as a business firm incorporated in one country that has production and sales operations in several other countries. Indeed, some MNCs have operations in dozens of different countries. MNCs obtain financing from major money centers around the world in many different currencies to finance their operations. Global operations force the treasurer’s office to establish international banking relationships, to place short-term funds in several currency denominations, and to effectively manage foreign exchange risk.7. Mr. Ross Perot, a former Presidential candidate of the Reform Party, which is a third political party in the United States, had strongly objected to the creation of the North American Trade Agreement (NAFTA), which nonetheless was inaugurated in 1994, for the fear of losing American jobs to Mexico where it is much cheaper to hire workers. What are the merits and demerits of Mr. Pe rot’s position on NAFTA? Considering the recent economic developments in North America, how would you assess Mr. Perot’s position on NAFTA?Answer: Since the inception of NAFTA, many American companies indeed have invested heavily in Mexico, sometimes relocating production from the United States to Mexico. Although this might have temporarily caused unemployment of some American workers, they were eventually rehired by other industries often for higher wages. Currently, the unemployment rate in the U.S. is quite low by historical standard. At the same time, Mexico has been experiencing a major economic boom. It seems clear that both Mexico and the U.S. have benefited from NAFTA. Mr. Perot’s concern appears to have been ill founded.8. In 1995, a working group of French chief executive officers was set up by the Confederation of French Industry (CNPF) and the French Association of Private Companies (AFEP) to study the French corporate governance structure. The group reported the following, among other things “The board of directors should not simply aim at maximizing share values as in the U.K. and the U.S. Rather, its goal should be to serve the company, whose interests should be clearly distinguished from those of its shareholders, employees, creditors, suppliers and clients but still equated with their general common interest, which is to safeguard the prosperity and continuity of the company”. Evaluate the above recommendation of the working group.Answer: The recommendations of the French working group clearly show that shareholder wealth maximization is not a universally accepted goal of corporate management, especially outside the United States and possibly a few other Anglo-Saxon countries including the United Kingdom and Canada. To some extent, this may reflect the fact that share ownership is not wide spread in most other countries. In France, about 15% of households own shares.9. Emphasizing the importance of voluntary compliance, as opposed to enforcement, in the aftermath of corporate scandals, e.g., Enron and WorldCom, U.S. President George W. Bush stated that while tougher laws might help, “ultimately, the ethics of American business depends on the conscience of America’s business leaders.” Describe your view on this statement.Answer: There can be different answers to this question. If business leaders always behave with a high ethical standard, many of the corporate scandals we have seen lately might not have happened. Since we cannot fully depend on the ethical behavior on the part of business leaders, the society should protect itself by adopting the rules/regulations and governance structure that would induce business leaders to behave in the interest of the society at large.10. Suppose you are interested in investing in shares of Nokia Corporation of Finland, which is a world leader in wireless communication. But before you make investment decision, you would like to learn about the company. Visit the website of CNN Financial network () and collect information about No kia, including the recent stock price history and analysts’ views of the company. Discuss what you learn about the company. Also discuss how the instantaneous access to information via internet would affect the nature and workings of financial markets.Answer: As students might have learned from visiting the website, information is readily available even for foreign companies like Nokia. Ready access to international information helps integrate financial markets, dismantling barriers to international investment and financing. Integration, however, may help a financial shock in one market to be transmitted to other markets.MINI CASE: NIKE’S DE CISIONNike, a U.S.-based company with a globally recognized brand name, manufactures athletic shoes in such Asian developing countries as China, Indonesia, and Vietnam using subcontractors, and sells the products in the U.S. and foreign markets. The company has no production facilities in the United States. In each of those Asian countries where Nike has production facilities, the rates of unemployment and underemployment are quite high. The wage rate is very low in those countries by the U.S. standard; hourly wage rate in the manufacturing sector is less than one dollar in each of those countries, which is compared with about $18 in the U.S. In addition, workers in those countries often are operating in poor and unhealthy environments and their rights are not well protected. Understandably, Asian host countries are eager to attract foreign investments like Nike’s to develop their economies and raise the living standards of their citizens. Recently, however, Nike came under a world-wide criticism for its practice of hiring workers for such a low pay, “next to nothing” in the words of critics, and condoning poor working conditions in host countries.Evaluate and discuss various ‘ethical’ as well as economic ramifications of Nike’s decision to invest in those Asian countries.Suggested Solution to Nike’s DecisionObviously, Nike’s investments in such Asian countries as China, Indonesia, and Vietnam were motivated to take advantage of low labor costs in those countries. While Nike was criticized for the poor working conditions for its workers, the company has recognized the problem and has substantially improved the worki ng environments recently. Although Nike’s workers get paid very low wages by the Western standard, they probably are making substantially more than their local compatriots who are either under- or unemployed. While Nike’s detractors may have valid points, one should not ignore the fact that the company is making contributions to the economic welfare of those Asian countries by creating job opportunities.CHAPTER 1A THEORY OF COMPARATIVE ADVANTAGESUGGESTED SOLUTIONS TO APPENDIX PROBLEMSPROBLEMS1. Country C can produce seven pounds of food or four yards of textiles per unit of input. Compute the opportunity cost of producing food instead of textiles. Similarly, compute the opportunity cost of producing textiles instead of food.Solution: The opportunity cost of producing food instead of textiles is one yard of textiles per 7/4 = 1.75 pounds of food. A pound of food has an opportunity cost of 4/7 = .57 yards of textiles.2. Consider the no-trade input/output situation presented in the following table for Countries X and Y. Assuming that free trade is allowed, develop a scenario that will benefit the citizens of both countries.INPUT/OUTPUT WITHOUT TRADE_______________________________________________________________________CountryX Y Total________________________________________________________________________ I. Units of Input(000,000)_______________________ ______________________________Food 70 60Textiles 40 30________________________________________________________________________ II. Output per Unit of Input(lbs or yards)______________________ ______________________________Food 17 5Textiles 5 2________________________________________________________________________ III. Total Output(lbs or yards)(000,000)______________________ ______________________________Food 1,190 300 1,490Textiles 200 60 260________________________________________________________________________ IV. Consumption(lbs or yards)(000,000)_____________________ ______________________________Food 1,190 300 1,490Textiles 200 60 260________________________________________________________________________Solution:Examination of the no-trade input/output table indicates that Country X has an absolute advantage in the production of food and textiles. Country X can “trade off” one unit of production needed to produce 17 pounds of food for five yards of textiles. Thus, a yard of textiles has an opportunity cost of 17/5 = 3.40 pounds of food, or a pound of food has an opportunity cost of 5/17 = .29 yards of textiles. Analogously, Country Y has an opportunity cost of 5/2 = 2.50 pounds of food per yard of textiles, or 2/5 = .40 yards of textiles per pound of food. In terms of opportunity cost, it is clear that Country X is relatively more efficient in producing food and Country Y is relatively more efficient in producing textiles. Thus, Country X (Y) has a comparative advantage in producing food (textile) is comparison to Country Y (X).When there are no restrictions or impediments to free trade the economic-well being of the citizens of both countries is enhanced through trade. Suppose that Country X shifts 20,000,000 units from the production of textiles to the production of food where it has a comparative advantage and that Country Y shifts 60,000,000 units from the production of food to the production of textiles where it has a comparative advantage. Total output will now be (90,000,000 x 17 =) 1,530,000,000 pounds of food and [(20,000,000 x 5 =100,000,000) + (90,000,000 x 2 =180,000,000) =] 280,000,000 yards of textiles. Further suppose that Country X and Country Y agree on a price of 3.00 pounds of food for one yard of textiles, and that Country X sells Country Y 330,000,000 pounds of food for 110,000,000 yards of textiles. Under free trade, the following table shows that the citizens of Country X (Y) have increased their consumption of food by 10,000,000 (30,000,000) pounds and textiles by 10,000,000 (10,000,000) yards.INPUT/OUTPUT WITH FREE TRADE__________________________________________________________________________CountryX Y Total__________________________________________________________________________ I. Units of Input(000,000)_______________________ ________________________________Food 90 0Textiles 20 90__________________________________________________________________________ II. Output per Unit of Input(lbs or yards)______________________ ________________________________Food 17 5Textiles 5 2__________________________________________________________________________ III. Total Output(lbs or yards)(000,000)_____________________ ________________________________Food 1,530 0 1,530Textiles 100 180 280__________________________________________________________________________ IV. Consumption(lbs or yards)(000,000)_____________________ ________________________________Food 1,200 330 1,530Textiles 210 70 280__________________________________________________________________________。

国际金融练习题答案Chapter 1 Globalization and the Multinational Enterprise exercise answer

Chapter 1Globalization and the Multinational Enterprise1.1Multiple Choice and True/False Questions1) Which of the following are critical to a firm trying to reach the top of the "firm value pyramid"?A)an open market placeB) high quality strategic managementC) access to capitalD) all of the above2) A well-established, large firm U.S.-based MNE will probably not be able to overcome which of the following obstacles to maximizing firm value?A) an open market placeB) high quality strategic managementC)access to capitalD)none of the above3)Three necessary conditions for a firm to reach the top of the "firm value pyramid" are an open market place, high quality strategic management, and access to capital.4)A well-established, large China-based MNE will probably be most adversely affected by which of the following elements of firm value?A) an open marketplaceB) high-quality strategic managementC)access to capitalD)access to qualified labor pool5)A well-established, large, Brazil-based MNE will probably be most adversely affected by which of the following elements of firm value?A) an open marketplaceB)high-quality strategic managementC)access to capitalD)access to qualified labor pool6)The theory that suggests specialization by country can increase worldwide production is ________.A)the theory of comparative advantageB) the theory of foreign direct investmentC) the international Fisher effectD)the theory of working capital management7)Which of the following would NOT be a way to implement comparative advantage?A)IBM exports computers to Egypt.B)Computer hardware is designed in the United States but manufactured and assembled in Korea.C)Water of the greatest purity is obtained from wells in Oregon, bottled, and exported worldwide.D) All of the above are examples of ways to implement comparative advantage.8) Which of the following would NOT be considered a feature of comparative advantage?A)Exporters in Country A sell goods or services to unrelated importers in Country B.B) Firms in Country A specialize in making products that can be produced relatively efficiently, given County A's endowment of factors of production. Firms in Country B do likewise thus maximizing the combined output of Countries A and B.C)Trade exists between Counties A and B because of specialized factors of production that cannot be moved among countries.D) All of the above are features of comparative advantage.9)Of the following, which would NOT be considered a way that government interferes with comparative advantage?A)tariffsB)managerial skillsC)quotasD)other non-tariff restrictions10)Comparative advantage shifts over time as less developed countries become more developed and realize their latent opportunities.11) Comparative advantage was once the cornerstone of international trade theory, but today it is archaic, simplistic, and irrelevant for explaining investment choices made by MNEs.12)In determining why a firm becomes multinational there are many reasons. One reason is that the firm is a market seeker. Which of the following is NOT a reason why market seeking firms produce in foreign countries?A)satisfaction of local demand in the foreign countryB)satisfaction of local demand in the domestic marketsC)political safely and small likelihood of government expropriation of assetsD)All of the above are market-seeking activities.13) ________ investments are designed to promote and enhance the growth and profitability of the firm. ________ investments are designed to deny those same opportunities to the firm's competitors.A)Conservative; aggressiveB)Defensive; proactiveC)Proactive; defensiveD)Aggressive; proactive14) Which of the following is NOT considered to be a type of competitive advantage that may be enjoyed by an MNE?A) managerial and marketing expertiseB) superior technology due to investment in research and developmentC)increased agency costsD) differentiated products15)Which of the following is NOT considered to be a type of competitive advantage that may be enjoyed by an MNE?A) competitiveness in their home marketsB) foreign exchange risksC) economies of scaleD) economies of scope16) The phase of the globalization process characterized by imports from foreign suppliers and exports to foreign buyers is called theA)domestic phase.B) multinational phase.C) international trade phase.D) import-export banking phase.17) The authors describe the multinational phase of globalization for a firm as one characterized by theA)ownership of assets and enterprises in foreign countries.B) potential for international competitors or suppliers even though all accounts are with domestic firms and are denominated in dollars.C) imports from foreign suppliers and exports to foreign buyers.D) requirement that all employees be multilingual.18) Of the following, which was NOT mentioned by the authors as an increase in the demands of financial management services due to increased globalization by the firm?A) evaluation of the credit quality of foreign buyers and sellersB)foreign consumer method of payment preferencesC) credit risk managementD)evaluation of foreign exchange risk19)The authors describe the multinational phase of globalization for a firm as one characterized by theA) ownership of assets and enterprises in foreign countries.B) potential for international competitors or suppliers even though all accounts are with domestic firms and are denominated in dollars.C) imports from foreign suppliers and exports to foreign buyers.D) requirement that all employees be multilingual.20) Of the following, which was NOT mentioned by the authors as an increase in the demands of financial management services due to increased globalization by the firm?A)evaluation of the credit quality of foreign buyers and sellersB) foreign consumer method of payment preferencesC) credit risk managementD)evaluation of foreign exchange risk21) Typically, a firm in its domestic stage of globalization has all financial transactions in its domestic currency.22)A firm in the International Trade Phase of GlobalizationA)makes all foreign payments in foreign currency units and all foreign receipts in domestic currency units.B)receives all foreign receipts in foreign currency units and makes all foreign payments in domestic currency units.C) bears direct foreign exchange risk.D) none of the above.23) The exposure to foreign exchange risk known as Translation Exposure may be defined asA) changes in reported owners' equity in consolidated financial statements caused by a change in exchange rates.B) the impact of settling outstanding obligations entered into before change in exchange rates but to be settled after change in exchange rates.C)the change in expected future cash flows arising from an unexpected change in exchange rates.D)all of the above.24)The twin agency problems limiting financial globalization are caused by these two groups acting in their own self-interests rather than the interests of the firm.A)rulers of sovereign states and unsavory customs officialsB) corporate insiders and attorneysC) corporate insiders and rulers of sovereign statesD) attorneys and unsavory customs officialsChapter 1 Globalization and the Multinational Enterprise exercise answer1、A 2 、D 3、T 4、A 5、C 6、A 7、D 8、D 9、B 10、T 11、F 12、C13、C 14、C 15、B 16、C 17、A 18、B 19、A 20、B 21、T 22、C 23、A 24、C25、C 26、B 27、C 28、A 29、A 30、CTABLE 1.1Use the information in the table to answer following question(s).25) Refer to Table 1.1. A production unit in Austria has a/an ________ over a production unit in Russia in ________.A) absolute disadvantage; digital camerasB) absolute disadvantage; snowboardsC) absolute advantage; both cameras and snowboardsD) none of the above26) Refer to Table 1.1. Austria has a larger relative advantage over Russia in the production of ________ at a ratio of ________.A) snowboards; 5 to 4B) cameras; 8 to 3C) snowboards; 8 to 3D) cameras; 3 to 827) Refer to Table 1.1. Assume no trade between Russia and Austria. If each country put 50% of their production units into each product, the total number of snowboards and digital cameras produced by the two countries combined are ________ and ________.A) 15,000 snowboards; 3,000 digital camerasB) 6,000 snowboards; 4,000 digital camerasC) 2,750 digital cameras; 6,750 snowboardsD) 15,000 digital cameras; 1,000 snowboards28) Refer to Table 1.1. If trade takes place at Brazil's domestic price, ________ snowboards will be required to obtain 1 digital camera.A) 4B) 2 and 2/3C) 1.25D) 0.2529) Refer to Table 1.1. If each country specializes in their production with Austria producing only digital cameras and Russia producing only snowboards, at a trading rate of three snowboards per digital camera, how many cameras and snowboards will be available to be consumed in Austria if they trade 3,000 cameras to Russia?A) 9,000 snowboards and 5,000 digital camerasB) 3,000 snowboards and 3,000 digital camerasC) 3,000 snowboards and 9,000 digital camerasD) There is not enough information to answer this question.30) Refer to Table 1.1. If each country specializes in their production with Austria producing only digital cameras and Russia producing only snowboards, at a trading rate of three snowboards per digital camera, how many cameras and snowboards will be available to be consumed in Russia if they trade 9,000 snowboards to Austria?A) 9,000 snowboards and 5,000 digital camerasB) 3,000 snowboards and 3,000 digital camerasC) 3,000 snowboards and 9,000 digital camerasD) There is not enough information to answer this question.。

(精品)国际金融英文版练习题-Chapter-1

国际金融英文版练习题-C h a p t e r-1International FinanceAssignment Problems (1) Name: Student No.:Choose the correct answer for the following questions (only ONE correct answer) 1. Which of the following is NOT true regarding the subject matter of international finance?A. International finance studies the important trade theories.B. International finance examines the theory of balance of payments and its relationship with macroeconomic variables.C. International finance studies exchange rate theories and the impacts of the exchange rate on the economy.D. International finance discusses the exchange rate risks and the derivative instruments by which people use to cover the exchange rate risks and to speculate.2. Globalization refers to __________.A. the strengthening of existing international linkages of commerce, finance and the addition of new international linkagesB. the expansion of world governance and global societyC. the increased mobility of peoples and informationD. All of the above3. Mutually beneficial trade requires each country to be the least-cost producer of at least one good that it can export to its trading partner. This is called __________.A. the theory of comparative advantageB. the international finance theoryC. the theory of absolute advantageD. the theory of balance of payments4. Which of the following would NOT be a way to implement comparative advantage?A. IBM exports computers to Gambia.B. Computer hardware is designed in the United States but manufactured and assembled in Malaysia.C. Water of the greatest purity is obtained from the wells in Oregon, bottled, and exported worldwide.D. All of the above are examples of ways to implement comparative advantage.5. Which of the following would NOT be considered a feature of comparative advantage?A. Exporters in country A sell goods to importers in countryB.B. Firms in country A specialize in making products that can be produced relative efficiently, given country A’s endowment of factors of production. Firms in country B do likewise thus maximizing the combined output of countries A and B.C. Trade exists between countries A and B because of specialized factors of production that cannot be moved among countries.D. All of the above are features of comparative advantage.6. The real sector in an economy deals with __________.A. transactions in all goods and servicesB. transactions in all financial assetsC. transactions in goods, services and financial assetsD. transactions in new technological products only7. Of the following, which would NOT be considered a way that government interferes with comparative advantage?A. tariffsB. quotasC. managerial skillsD. other non-tariff restrictions8. A firm with operations in more than one country is called a (an) _________.A. big firmB. multinational corporationC. international firmD. all of the above9. The primary goal of an MNC comes down to __________.A. seek marketsB. improve its production efficiencyC. gain access to technology or managerial expertiseD. maximize shareholder wealth10. World trade of goods and services has expanded in a remarkable pace because of the __________.A. reduction in trade barriersB. lower transportation costsC. advances in telecommunications, information technology and financial servicesD. All of the above are the reasons of rapid growth in international trade.11. Nowadays the world trade in goods and services is important __________.A. only to developed countriesB. only to less developed countriesC. to both developed and less developed countriesD. to neither developed nor less developed counties12. Which of the following is NOT a characteristic of the nowadays financial markets?A. Increasingly interdependent national financial marketsB. the global trend toward free-market economiesC. An increasingly number of cross-border partnerships, including many international merges, acquisitions, and joint venturesD. An increasing number of cooperative linkages among securities exchange13. __________ indicates that mutually beneficial trade can occur even when one nation is absolutely more efficient in the production of all goods.A. The theory of comparative advantageB. The theory of absolute advantageC. The theory of balance of paymentsD. The theory of exchange rate determination14. A well-established multinational company needs __________ to maximize itsfirm value.A. an open market placeB. high quality strategic managementC. access to capitalD. all of the aboveQuestions 15 through 20 are based on the information presented in table 1.1:Table 1.1Production capabilityContainers of snowboards Containers of digital camerasAustria has 1,000 units 15 containers/unit 8 containers/unitof production factorsRussia has 1,000 units 12 containers/unit 3 containers/unitof production factors15. One production factor in Austria has a (an) __________ over one production factor in Russia in _________.A. absolute disadvantage; digital camerasB. absolute disadvantage; snowboardsC. absolute advantage; both digital cameras and snowboardsD. none of the above16. Austria has a large comparative advantage over Russia in the production of__________ at a ratio of __________.A. snowboards; 5:4B. digital cameras; 8:3C. snowboards; 8:3D. digital cameras; 5:417. Assume no trade between Austria and Russia. If each country puts 50% of their factors into each product, the total number of snowboards and digital cameras produced by the two countries combined are __________ and _________.A. 13,500 snowboards; 5,500 camerasB. 12,000 snowboards; 8,000 camerasC. 5,500 snowboards; 13,500 camerasD. 3,000 cameras; 15,000 snowboards18. If trade takes place at Russia’s domestic price, __________ snowboards will be required to obtain 1 digital camera.A. 4B. 2.5C. 1.25D. 0.2519. If each country specializes in production with Austria producing only digital cameras and Russia producing only snowboards, at a trading rate of 3 snowboards per digital camera, how many cameras and snowboards will be available to be consumed in Austria if they trade 3,000 cameras to Russia?A. 9,000 snowboards and 5,000 camerasB. 3,000 snowboards and 3,000 camerasC. 3,000 snowboards and 9,000 camerasD. There is not enough information to answer this question20. If each country specializes in production with Austria producing only digital cameras and Russia producing only snowboards, at a trading rate of 3 snowboards per digital camera, how many cameras and snowboards will be available to be consumed in Russia if they trade 9,000 snowboards to Austria?A. 9,000 snowboards and 5,000 camerasB. 3,000 snowboards and 3,000 camerasC. 3,000 snowboards and 9,000 camerasD. There is not enough information to answer this questionAnswers to Assignment Problems (1)1. A2. D3. C4. D5. D6. A7. C8. B9. D 10. D11.C 12.B 13.A 14.D 15. C 16. B 17. A 18. A 19. A 20. B。

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1、In finance, an efficient market is one in which
(a) p rices are assumed to be correct.
(b)prices adjust quickly and accurately to new
information.
(c) p rices are the best allocators of capital in the macro
economy.
(d) All of the above.
2、In the Anglo-American model of corporate governance,
the primary goal of management is to
(a) m aximize the wealth of all stakeholders.
(b) maximize shareholder wealth.
(c) m inimize costs.
(d) minimize risk.
3、Systematic risk can be defined as
(a) t he total risk to the firm.
(b) the risk of the individual security.
(c) t he added risk that a firm’s shares bring to a
diversified portfolio.
(d) the risk that can be systematically diversified away.
4、Unsystematic risk can be defined as
(a) t he total risk to the firm.
(b)the risk of the individual security.
(c) t he added risk that a firm’s shares bring to a
diversified portfolio.
(d)the risk that can be systematically diversified away.
5、 Systematic risk is of prime concern to management
under the
(a) p atient capital theory of governance.
(b)corporate wealth maximization theory of governance.
(c) A nglo-American theory of governance.
(d)None of the above
6、_______________________ is the study of how
shareholders can motivate management to accept
prescriptions of the shareholder wealth maximization
model.
(a) P atient capitalism
(b)Agency theory
(c) T he capital asset pricing model
(d)The theory of multinational finance
7、Which of the following is inconsistent with long-term
corporate value maximization?
(a) A focus on overly generous short-term stock options.
(b)A focus on long-term wealth maximization.
(c) T he concept of patient capitalism.
(d)The avoidance of deceptive and dishonest business
practices.
8、The Stakeholder Capitalism Model
(a) c learly places shareholders as the primary
stakeholder.
(b)combines the interests and inputs of shareholders,
creditors, management, employees,
and society.
(c) h as financial profit as its goal and is often termed
impatient capital.
(d) is the Anglo–American model of corporate
governance.
9、The Shareholder Wealth Maximization Model
(a) c ombines the interests and inputs of shareholders,
creditors, management, employees,
and society.
(b)is being usurped by the Corporate Wealth
Maximization Model as those types of MNEs
dominate their global industry segments.
(c) c learly places shareholders as the primary
stakeholder.
(d)is the dominant form of corporate management in the
European-Japanese governance system.
10、With shareholder wealth maximization as the
manager’s goal, capital may be termed _____________.
(a)i mpatient
(b)patient
(c) b orrowed
(d)bought。

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