QUESTION

A. What is a multinational corporation? Why do firms expand into other countries?
B. Discuss at least six major factors which distinguish multinational financial management
from financial management as practiced by a purely domestic firm. (Please consider
doing additional research on this question and document your findings).
C. Discuss exchange rate risk as they relate to multinational corporations.
D. Describe the current International Monetary System. How does the current system differ
from the system that was in place prior to August 1971? (Please consider doing
additional research on this question and document your findings).
E. What is the difference between spot rates and forward rates? When is the forward rate
at a premium to the spot rate? At a discount? (Please consider doing additional
research on this question and document your findings).
F. From a managerial point of view, discuss how your responses above will help Citrus, Inc.
as they plan to expand overseas.

Public Answer

PM01K4 The First Answerer