On June 23, 1997, Japanese Prime Minister Ryutaro Hashimoto spooked Wall Street. At a Columbia University luncheon,
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On June 23, 1997, Japanese Prime Minister Ryutaro Hashimoto spooked Wall Street. At a Columbia University luncheon, he appeared to warn that the Japanese might sell U.S. Treasury bills unless the U.S. helped stabilize exchange rates. The Dow Jones Industrial Average fell 192 points.
a. Why might the stock market have fallen on such a remark? Trace the causal links.
b. How much substance is there to the possibility that the Japanese might sell off their U.S. investments? Explain.
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Foundations Of Multinational Financial Management
ISBN: 9780470128954
6th Edition
Authors: Alan C Shapiro, Atulya Sarin
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