Understanding international finance - interest rates.

Assume that foreign interest rates are expected to rise above US interest rates. What does this suggest about the future strength or weakness of the US dollar?

International Finance - International Parity condition - Expected exchange rate

Consider the following financial data: UK DM Inflation (expected annual) 10% 4% 1 Year Interest Rate 12% ?? Spot Exchange Rate (DM/pound) 3 Assuming the international parity conditions hold perfectly, what is the expected exchange rate in one year?

International Finance - USA Foreign Exchange Exposure- Economic, Translation, Transaction exposure

Please be as detailed as possible: A) Define foreign exchange exposure for a firm. Is a purely domestic firm subject to some foreign exchange exposure? If yes, why? B) What are the key differences among economic exposure, transaction exposure, and translation exposure?

Understanding international finance. Should a firm hedge? Why or why not? Many US firms do not hedge. How would you explain this result?

a) Should a firm hedge? Why or why not? b) Recent surveys of corporate exchange risk management practices indicate that many US firms do not hedge. How would you explain this result? c) GM exports cars to Spain, but the historically strong dollar against the Euro hurt sales of GM cars in Spain. In the Spanish market, GM faces competition from the German, Italian and French car makers. What kind of measures would you recommend so that GM can maintain its market share in Spain?

International Finance - Exam Prep Question - USA

Please be as detailed as possible. How would you explain the fact that China has emerged as a leading recipient of FDI in recent years?