Chapter 20, Problem 14QA

Moral hazard is a barrier to financing global growth because: OPTIONS: if investors have trouble identifying high-risk firms they may be unwilling to give money to creditworthy firms. firms sometimes have trouble determining whether they need funds or not. there is the possibility that the funds are used for riskier behavior than the lender agreed to. of the differences between financing using loans, portfolio investment and foreign direct investment.

According to the flow of balance of payment (BOP) approach to exchange rate determination, there are financial measures being put in place by countries with managed floating exchange rate regime in order to cope with a deficit in its BOP.In order to control those countries currency volatility and opt for stabilization what will happen if they run persistent BOP deficits for a couple of years?   T-Mobile., like many emerging telecom carriers, has only limited and infrequent access to domestic debt and equity markets. As a financial management at Ait, how would you be able to demonstrate to the Board of Directors and convince them as to why the Net Present Value and Internal  Rate of Return capital budgeting decision rules sometimes provide different  rank orderings of investment project alternatives?   Equipment that costs $15,000 and generates a $5,000 annual return would appear to "pay back" on the investment in 3 years. If economists expect inflation to rise 30 percent annually, what…

Excess funds can be used for domestic or foreign short-term investments. In some instances short-term securities on the international market will have higher interest rates than domestic interest rates and will therefore be pursued by an MNC. However, what are all the possible conditions that are expected to hold and for the MNC to consider : A) International Fisher Effect B) Exchange Rate Forecasting results C) Negative Effective Yield of the investment D) Interest Rate Parity E) Non-Diversified options for cash across currencies on the international market 1. C, D and E 2. A, B and D 3. A, B and C 4.  A, B, C and D