Question 12 pts
Which of the following is not a method used to reduce country risk:
 
 
 
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Question 22 pts
Higher interest rates in a foreign country tend to:
 
 
 
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Question 32 pts
A U.S. MNC has a subsidiary in a country where the government restricts earnings that can be remitted to the U.S. The MNC should finance the subsidiary with:
 
 
 
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Question 43 pts
The U.S. risk-free rate is currently 1% and the expected U.S. market return is 7%. A company is considering a project that has a beta of .85. What is the cost of dollar-denominated equity?
 
 
 
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Question 52 pts
A German MNC wants to raise 20 million euro by issuing Yankee bonds in the U.S. The current exchange rate is 1 euro = $1.31. How many dollars does the MNC need to obtain the 20 million euros?
 
 
 
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Question 62 pts
A U.S. company issues bonds in a foreign currency, and will need to convert dollars to service the debt. The company will pay less in debt service if:
 
 
 
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Question 72 pts
A U.S. company receives large pound cash inflows from goods it exports to Great Britain. The U.S. company has no other business outside the U.S. The company can best reduce its exposure to exchange rate risk by:
 
 
 
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Question 82 pts
The fixed rate payer in a plain vanilla swap believes interest rates are going to:
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