Chapter 18 LearnSmart

A US corporation can reduce political risk in a foreign country by which of the following ways

Use local financing

Which of the following are correct when describing purchasing power parity?

Exchange rates adjust to keep purchasing power level between currencies Parity is expressed as both absolute and relative Purchasing power parity is a major factor in the rate of change in exchange rates

Which of the following are financial factors that affects firms doing business globally?

Foreign tax rates, exchange rate risk, different accounting methods, differing interest rates, foreign government intervention

The different types of exchange rate risk include which of the following?

Long term exposure, short term exposure, translation exposure

The day to day fluctuations in exchange rates create

Short term exchange rate risk exposure