Assignment: Finance Questions

75-100 words per answer

1. What effect can cultural differences have on the ownership structure of a foreign operation of a multinational business?

2. What are intellectual property rights? How have changes in technology affected the ability to protect intellectual property rights?

3. What does it mean to nationalize a business? How can a domestic company minimize the risk of nationalization of its foreign operations?

4. Explain how purchasing power parity determines the exchange rate between two currencies.

5. Why are currency exchange rates constantly changing over time?

6. What is a cross rate? How can you find the cross rate of two foreign currencies if you know only the direct and indirect rates of those two foreign currencies with respect to your home currency?

7. Why should a company be concerned about a change in future exchange rates if it has already sold and delivered product in a foreign country?

8. How can a changing exchange rate affect a company's profits on one of its foreign operations?