________ is the ability to exercise effective control over a foreign subsidiary within a country’s legal and political environment.

Which of the following is NOT a contributing factor to the segmentation of capital markets?

The September 2010 Mexican peso futures contract has a price of $0.77275 per 10 MXN. You believe the spot price in September will be $0.83800 per 10 MXN. Calculate your anticipated profits, assuming you take a LONG position in three contracts. MXN500,000 is the contract size of one MXN contract.

Which of the following is an example of diversifying operations? Choose all correct answers to get credits. There are multiple answers. Choose all correct answers to get credits.

Suppose you are treasurer in a MNC and the MNC is going to receive 3M euro in three months. You are concerned about the dollar amount you are going to get from the euro receipt in 3 months. How would you hedge futures and options contracts?  There are two correct answers. Pick all correct answers.

Which of the following is NOT a market imperfection or genuine comparative advantage that attracts FDI to country A? Country A has ____________.

TropiKana Inc., a U.S. firm, has just borrowed ¢æ1,000,000 to make improvements to an Italian fruit plantation and processing plant. If the Euro interest rate is 5.50% per year and the Euro appreciates against the dollar from $1/¢æ at the time the loan was made to $1.05/¢æ at the end of the first year, what is the (before tax) dollar cost of loan if the firm repays the entire loan plus interest (rounded)?

Maria Gonzalez estimates the risk-free rate to be 3.60%, the company’s credit risk premium is 4.40%, the domestic beta is estimated at 1.05, the international beta at .85, and the company’s capital structure is 30% debt. Based on ICAPM, calculate weighted average cost of capital.Cost of debt, before tax, 8.00%Corporate income tax rate, 35%General return on market portfolio, 8.00%Based on ICAPM, calculate weighted average cost of capital

Political risk arises due to goal conflicts between concerned entities. Which of the following is NOT an example of political risk for MNCs?

A call option ___________.