Question: 3 . International Investments. U . S . - based MNCs commonly invest in foreign securities . a . Assume that the dollar is presently

3. International Investments. U.S.-based MNCs commonly invest in foreign securities. a. Assume that the dollar is presently weak and is expected to strengthen over time. How will these expectations affect the tendency of U.S. investors to invest in foreign securities? Illustrate this with the assumption that the USD/EUR exchange rate is .9223 now and is expected to be .9501 at the end of the investment horizon of a year; the value of the investment now is 100,000, and the investor can cash in the investment for 110,000.00 at the end of the year. b. Explain how low U.S. interest rates can affect the tendency of U.S.-based MNCs to invest abroad. c. In general terms, what is the attraction of foreign investments to U.S. investors?

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