Description Please read all questions carefully before answering using your own words. This test must be taken in one sitting and is timed for 3 hours. | will not reopen for excess time. The test will auto submit at the end of 3 hours. ANSWER FEEDBACK IS AVAILABLE AFTER DUE DATE Question 1 10 Points Why do you think international trade volume has increased over time? In general,how are inefficient firms affected by the reduction in trade restrictions among countries and the continuous increase in international trade? Use the editor to format your answer Question 2 10 Points Assume the spot rate of the British pound is $1.73. The expected spot rate one year from now is assumed to be $1.66. What percentage depreciation does this reflect? Use the editor to format your answer Compare and contrast the fixed, freely floating, and managed float exchange rate systems. What are some advantages and disadvantages of a freely floating exchange rate system versus a fixed exchange rate system? Use the editor to format your answer Question 4 10 Points Explain the rationale underlying PPP theory. Use the editor to format your answer How should appreciation of a firm's home country currency generally affect its cash inflows? How should depreciation of a firm's home country currency generally affect its cash outflows? Use the editor to format your answer Question 6 10 Points Assume that Stevens Point Co. has net receivables of 100,000 Singapore dollars in 90 days. The spot rate of the S$ is $.50, and the Singapore interest rate is 2% over 90 days. Suggest how the U.S. firm could implement a money market hedge. Be precise. Use the editor to format your answer Question 7 10 Points When an MNC restructures its operations to reduce its economic exposure, it may sometimes forgo economies of scale. Explain. Use the editor to format your answer Question 8 10 Points Describe the steps involved in assessing country risk once all relevant information has been gathered. Use the editor to format your answer Wizard, Inc. has a subsidiary in a country where the government allows only a small amount of earnings to be remitted to the U.S. each year. Should Wizard finance the subsidiary with debt financing by the parent, equity financing by the parent, or financing by local banks in the foreign country? Use the editor to format your answer How can a U.S. firm finance in euros and not necessarily be exposed to exchange rate risk? Use the editor to format your