International Financial Markets Walmart has established two retail outlets in the city of Shanzen, China, which has a population of 3.7 million. These massive outlets sell imported goods in addition to products produced locally. As Walmart generates earnings beyond what it needs in Shanzen, it may remit those earnings back to the United States. Walmart is likely to build additional outlets in Shanzen or in other Chinese cities in the future. Explain how the Walmart outlets in China would use the spot market in foreign exchange. Explain how Walmart might use the international money markets when it is establishing other Walmart stores in Asia. Explain how Walmart could use the international bond market to finance the establishment of new outlets in foreign markets.

FindFind

International Financial Management

14th Edition
Madura
Publisher: Cengage
ISBN: 9780357130698
FindFind

International Financial Management

14th Edition
Madura
Publisher: Cengage
ISBN: 9780357130698

Solutions

Chapter 3, Problem 22QA
Textbook Problem

International Financial Markets Walmart has established two retail outlets in the city of Shanzen, China, which has a population of 3.7 million. These massive outlets sell imported goods in addition to products produced locally. As Walmart generates earnings beyond what it needs in Shanzen, it may remit those earnings back to the United States. Walmart is likely to build additional outlets in Shanzen or in other Chinese cities in the future.

  1. Explain how the Walmart outlets in China would use the spot market in foreign exchange.
  2. Explain how Walmart might use the international money markets when it is establishing other Walmart stores in Asia.
  3. Explain how Walmart could use the international bond market to finance the establishment of new outlets in foreign markets.

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