International Financial Management
14th Edition
ISBN: 9780357130698
Author: Madura
Publisher: Cengage
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Effect of 9/11 on Forward Rate Forecasts
The September 11, 2001, terrorist attack on the United States was quickly followed by lower interest rates in the United States. How would this affect a fundamental forecast of foreign currencies? How would this affect the forward rate forecast of foreign currencies?
29.World Central Banks Act as EU Growth Stalls
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INTERNATIONAL BUSINESS AND TRADE
Mini-Case Synopsis and Questions
In 2008 and 2009, international financial markets suffered large declines in stock, bond, and real estate prices. Due to excessive government spending and related borrowing, Greece experienced a debt crisis that worsened after the introduction of the euro. To head off default, the Troika provided Greece a bailout in 2012. Some experts believe Greece should exit the euro entirely, but others argue that if other countries follow Greece, the euro and the EU itself could be seriously damaged.
Questions:
How did Greece get into trouble with its government debt? Did joining the Eurozone help them pay rising government debts? Explain your answers.
Should Greece exit the euro? How would it benefit? What could go wrong? Explain your answers.
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