What risks can an investor face in case of a foreign direct investment? 

b) WSM Wine Importers, Inc. purchased 75,000 cases of French wine at a cost of 6,000,000 euros. If the current exchange rate is 0.7576 euros to the U.S. dollar, what is the purchase price of the wine in U.S. dollars? 

c) The current direct quote in New York is .01075 dollars per yen. Suppose the current direct quote in Tokyo is 91 yen per dollar. What is the appropriate indirect quote in New York? What will arbitrageurs do to eliminate the differential rates in these markets?

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Risks in Foreign Direct Investment Foreign direct investment FDI can expose investors to various ris... View the full answer