An electrochemical gradient is a gradient of electrochemical…
An electrochemical gradient is a gradient of electrochemical potential, usually for an ion that can move across a membrane. The gradient consists of two parts, the chemical gradient, or difference in solute concentration across a membrane, and the electrical gradient, or difference in charge across a membrane. What are the solute(s) ions involved in the chemical gradient and what is the relative charge difference?
Read DetailsJacko Co. is a U.S.-based MNC with net cash inflows of euros…
Jacko Co. is a U.S.-based MNC with net cash inflows of euros and net cash inflows of Sunland francs. These two currencies are highly negatively correlated in their movements against the dollar. Kriner Co. is a U.S.-based MNC that has the same exposure as Jacko Co. in these currencies, except that its Sunland francs represent cash outflows. Which firm has a lower exposure to exchange rate risk?
Read DetailsU.S. Jordan 360-day borrowing rate 5% 6% 3…
U.S. Jordan 360-day borrowing rate 5% 6% 360-day deposit rate 4% 5% Pablo Corp. will need 150,000 Jordanian dinar (JOD) in 360 days. The current spot rate of the dinar is $1.46, while the 360-day forward rate is $1.48. What is Pablo’s cost from implementing a money market hedge (assume Pablo does not have any excess cash)?
Read DetailsAssume that Mill Corporation, a U.S.-based MNC, has applied…
Assume that Mill Corporation, a U.S.-based MNC, has applied the following regression model to estimate the sensitivity of its cash flows to exchange rate movements: PCFt = a0 + a1et + mt where the term on the left-hand side is the percentage change in inflation-adjusted cash flows measured in the firm’s home currency over period t, and et is the percentage change in the exchange rate of the currency over period t. The regression model estimates a coefficient of a1 of -2. This indicates that:
Read Details