Bradenton, Inc., has a foreign subsidiary in Asia that commonly obtained short-term financing from local banks prior to the Asian crisis. Explain why the firm may not be able to easily obtain funds from the local banks since the crisis.View Solution: Bradenton Inc has a foreign subsidiary in Asia that commonly

Bradenton, Inc., has a foreign subsidiary in Asia that commonly obtained short-term financing from local banks prior to the Asian crisis. Explain why the firm may not be able to easily obtain funds from the local banks since the crisis.View Solution: Bradenton Inc has a foreign subsidiary in Asia that commonly

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter2: International Flow Of Funds

Section: Chapter Questions

Problem 5BIC

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Suppose a U.S. firm builds a factory in China, staffs it with Chinese workers, uses materials supplied by Chinese companies, and finances the entire operation with a loan from a Chinese bank located in the same town as the factory. This firm is most likely trying to greatly reduce, or eliminate, which one of the following? Interest rate disparities Short-run exposure to exchange rate risk Long-run exposure to exchange rate risk Political risk associated with the foreign operations Translation exposure to exchange rate risk
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