[EC249] - Midterm Exam Guide - Comprehensive Notes for the exam (24 pages long!)
Document Summary
Hours: thursdays 2:30 pm to 4pm or email for appt. Major derivatives--> something that depends on something else. Foreign direct investment, cross-border acquisitions and corporate governance. Each tuesday and thursday-- best out of the two, same questions on thursday as on tuesday. Business requires finance and international business deals with international finance. Market imperfections (differences in regulation, tax law and government policies) Allows for a larger customer base to trade internationally rather than solely domestically. Risk foreign currency profits may evaporate in dollar terms due to unanticipated exchange rate movements. Suppose = 100 and you buy 10 shares of. Toyota for 100,000 (i. e. per share = One year later investment is worth 10% more in yen: 110,000. But if yen has depreciated to = 120, your investment lost value in dollar terms (110,000/120=. 67) Variability in the exchange rate after the breton. Sovereign countries can change the laws as they wish.
