Multiple Choice
Which of the following is a scenario under which a U.S.-based MNC probably would not consider short-term foreign financing?
A) Canadian dollars offer a lower interest rate than is available in the United States and are expected to appreciate over the maturity of the loan.
B) Australian dollars offer a lower interest rate than is available in the United States and are expected to depreciate over the maturity of the loan.
C) The MNC has net receivables in British pounds.
D) Canadian dollars offer a lower interest rate than is available in the United States and are expected to appreciate over the maturity of the loan AND the MNC has net receivables in British pounds.
E) None of these are correct.
Correct Answer:

Verified
Correct Answer:
Verified
Q3: A firm without any exposure to foreign
Q4: The interest rates on Euronotes are based
Q5: One reason an MNC may consider foreign
Q6: Assume the U.S. interest rate is 7.5
Q7: If interest rate parity exists and the
Q9: If interest rate parity does not hold,
Q10: If movements of two currencies with low
Q11: Kushter, Inc. would like to finance in
Q12: If interest rate parity exists, and the
Q13: A negative effective financing rate implies that