31International Corporate Finance4.Which of the following is true?
C 5.According to the text:A)banks in most non-U.S. countries are as capable as the U.S. in facilitating cash transfers andmost other cash management operations for MNCs.B)banks in most non-U.S. countries are more advanced than the U.S. in facilitating cashtransfers for MNCs.C)an MNC with subsidiaries in several different countries has no problems in coordinating itscash transfers since a uniform global banking system exists.D)none of the aboveANSWER:
D 6.In what is known as dynamic hedging, banks periodically hedge those currencies expected tomove unfavorably and remove currencies that are expected to move favorably.
B7.Assume the U.S. one-year interest rate is 11% and the French one-year interest rate is 18%. The break-even level of depreciation in the euro at which the U.S. and French investmentswould exhibit the same return to a U.S. investor is: