 |  Fundamentals of Corporate Finance, 4/e Stephen A. Ross,
Massachusetts Institute of Technology
Randolph W. Westerfield,
University of Southern California
Bradford D. Jordan,
University of Kentucky
Gordon S. Roberts,
York University
International Corporate Finance
Learning ObjectivesAfter studying this chapter in the textbook, you should be able to:
| Compute cross-rates between any given pair of currencies. |
| | | | Work through a given scenario to determine if a triangle arbitrage opportunity exists between three currencies. |
| | | | Distinguish between absolute and relative purchasing power parity and be able to check to see if these relationships hold. |
| | | | Determine if interest rate parity holds in a given situation and compute arbitrage profits if it does not. |
| | | | Explain the implications of the international Fisher effect. |
| | | | Conduct an international capital budgeting analysis. |
| | | | Explain how a currency swap can enable a company to hedge against foreign exchange risk. |
| | | | Explain how currency options can be used to hedge against foreign exchange risk. |
| | | | Define and give an example of translation risk. |
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2002 McGraw-Hill Higher Education