Explain why infrastructure strengths have helped to offset the large BOP deficits on current account in the United States.
Answer to relevant QuestionsDefine the following terms: a. Foreign exchange exposure. b. The three types of foreign exchange exposure: Describe four arguments in favor of a firm pursuing an active currency risk management program. What is the central problem involved in consolidating the financial statements of a foreign subsidiary? Explain how back-to-back loans can hedge foreign exchange operating exposure. Why did Novo believe that its cost of capital was too high compared to its competitors? Why did Novo’s relatively high cost of capital create a competitive disadvantage?
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