InternationalFinancialManagement9国际财务管理培训教材.ppt

* Questions and Applications *1. Discuss the general functions involved in International Cash Management. *2. What is “netting” and how can it improve an MNC’s performance? *3. How can an MNC implement leading and lagging techniques to help subsidiaries in need of funds? * Questions and Applications *4. How can a centralized cash management system be beneficial to the MNC? 5. Evansville, Inc., has $2 million in cash available for 90 days. It is considering the use of covered interest arbitrage, since the euro’s 90-day interest rate is higher than the U.S. interest rate. What will determine whether this strategy is feasible? * Questions and Applications 6. Dallas Co. Has determined that the interest rate on euros is 16 percent while the U.S. interest rate is 11 percent for one-year treasury bills. The one-year forward rate of the euro has a discount of 7 percent. Does interest rate parity exist? Can Dallas achieve a higher effective yield by using covered interest arbitrage than by investing in U.S. Treasury bills? Explain. * Questions and Applications 7. Fort Collins, Inc., has $1 million in cash available for 30 days. It can earn 1 percent on a 30-day investment in the United States. Alternatively, if it converts the dollar to Mexican pesos, it can earn 1? percent on a Mexican deposit. The spot rate of the Mexican Peso is $.12. The spot rate 30 days from now is expected to be $.10. Should Fort Collins invest its cash in the United States or in Mexico? Substantiate your answer. * Questions and Applications 8. Assume that the one-year U.S. interest rate is 10 percent and the one-year