A) As a US investor and you have invested in British Government bonds (denominated in British Pound) which pay you a fixed coupon rate. Assume that during your investment period, the US dollar has significantly depreciated against the British Pound. How would it affect your cash flows in the US? Why? (1 mark)

B) Microsoft sells most of its products outside the US. Assume that during the last year, the US dollar has significantly appreciated against major world currencies. How would it affect Apple’s income, which is headquartered in the US? Why? (1 mark)

C) Assume that you work for a finance ministry of a country that largely earns its income through exports. The country is going through a difficult economic period. You have been asked to advise whether the country should revise its exchange rate. Would you advise the appreciation or the depreciation of the country’s currency? Why? (1 mark)

Question 4: Assume that you work for an investment bank and your bank is a lead underwriter for the upcoming IPO. You have suggested a lock-up provision for the IPO. Please describe why a lockup provision is important for IPOs and why it is required by a lead underwriter. (2 points)

Question 5: You work in the top management of a company, and you fear that your company may be taken over by another firm. You have been asked to suggest at least three strategies that may serve as barriers to Corporate Control. Please briefly describe these barriers

Answer rating: 100% (QA)

A If the US dollar has significantly depreciated against the British pound during your investment period the cash flows you receive from your British ... View the full answer