Risks and benefits of conducting business internationally

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Reference no: EM132020499

1. Why do businesses decide to acquire other businesses and how do they decide to divest parts of their business? What are the risks and benefits of conducting business internationally?

2. A bank needs to borrow $10 million in three months for a nine - month period. It buys a “three against twelve”” FRA for $10 million at a rate of 8% to hedge its exposure . In three months the FRA settles at 7.5%. There are 273 days in the FRA period.. What is the bank’s net borrowing cost for the 273 days (at an annualized rate)?

3. "Consider the following cash flow and compute the equivalent annual worth at i = 12.9%. The cash flow for years 0 through 6 in dollars is: 23,000 -4,300 -4,300 -7,200 -9,400 -13,900 -19,200 The answer could be negative."

Reference no: EM132020499

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