Multinational finance:
Gespeichert in:
| 1. Verfasser: | |
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| Format: | Buch |
| Sprache: | English |
| Veröffentlicht: |
Chichester, West Sussex
Wiley
2008
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| Ausgabe: | 4. ed. |
| Schlagworte: | |
| Online-Zugang: | Contributor biographical information Publisher description Table of contents only Inhaltsverzeichnis |
| Beschreibung: | Includes bibliographical references and indexes |
| Beschreibung: | XIX, 584 S. Ill., graph. Darst. 26 cm |
| ISBN: | 9781405181181 1405181184 |
Internformat
MARC
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| 245 | 1 | 0 | |a Multinational finance |c Kirt C. Butler |
| 250 | |a 4. ed. | ||
| 264 | 1 | |a Chichester, West Sussex |b Wiley |c 2008 | |
| 300 | |a XIX, 584 S. |b Ill., graph. Darst. |c 26 cm | ||
| 336 | |b txt |2 rdacontent | ||
| 337 | |b n |2 rdamedia | ||
| 338 | |b nc |2 rdacarrier | ||
| 500 | |a Includes bibliographical references and indexes | ||
| 650 | 4 | |a Multinationales Unternehmen | |
| 650 | 4 | |a International business enterprises |x Finance | |
| 650 | 4 | |a Foreign exchange | |
| 650 | 4 | |a International finance | |
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| 650 | 0 | 7 | |a Internationaler Kreditmarkt |0 (DE-588)4120506-6 |2 gnd |9 rswk-swf |
| 650 | 0 | 7 | |a Multinationales Unternehmen |0 (DE-588)4075092-9 |2 gnd |9 rswk-swf |
| 689 | 0 | 0 | |a Internationaler Kreditmarkt |0 (DE-588)4120506-6 |D s |
| 689 | 0 | 1 | |a Finanzierung |0 (DE-588)4017182-6 |D s |
| 689 | 0 | |5 DE-604 | |
| 689 | 1 | 0 | |a Multinationales Unternehmen |0 (DE-588)4075092-9 |D s |
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| 856 | 4 | |u http://www.loc.gov/catdir/enhancements/fy0827/2008378221-b.html |3 Contributor biographical information | |
| 856 | 4 | |u http://www.loc.gov/catdir/enhancements/fy0827/2008378221-d.html |3 Publisher description | |
| 856 | 4 | |u http://www.loc.gov/catdir/enhancements/fy0827/2008378221-t.html |3 Table of contents only | |
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Datensatz im Suchindex
| _version_ | 1804137665606451200 |
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| adam_text | Preface vii
Tableof Contents xiii
Detailed Table of Contents xiv
The International Financial Environment 1
Chapter 1 An Introduction to Multinational Finance 3
Chapter 2 World Trade and the International Monetary System 17
Chapter 3 Foreign Exchange and Eurocurrency Markets 37
Chapter 4 The International Parity Conditions 61
Derivative Securities for Financial Risk Management 89
Chapter 5 Currency Futures and Futures Markets 91
Chapter 6 Currency Options and Options Markets 113
Chapter 7 Currency Swaps and Swaps Markets 147
Managing the Risks of Multinational Operations 171
Chapter 8 The Rationale for Hedging Currency Risk 173
Chapter 9 Treasury Management of International Transactions 193
Chapter 10 Managing Transaction Exposure to Currency Risk 219
Chapter 11 Managing Operating Exposure to Currency Risk 241
Chapter 12 Managing Translation Exposure
and Accounting for Financial Transactions 261
Valuation and the Structure of Multinational Operations 283
Chapter 13 Foreign Market Entry and Country Risk Management 285
Chapter 14 Cross-Border Capital Budgeting 309
Chapter 15 Multinational Capital Structure and Cost of Capital 331
Chapter 16 Taxes and Multinational Corporate Strategy 359
Chapter 17 Real Options and Cross-Border Investment Strategy 379
Chapter 18 Corporate Governance
and the International Market for Corporate Control 405
International Portfolio Investment and Asset Pricing 435
Chapter 19 International Capital Markets 437
Chapter 20 International Portfolio Diversification 467
Chapter 21 International Asset Pricing 499
Glossary 523
Solutions to Even-Numbered Problems 537
Name Index 559
Subject Index 565
Addenda 581
xiv
Contents in Detail
PART ONE The International Financial Environment
Chapter 1 An Introduction to Multinational Finance j
U ™fRGK°S upnATp H ^r31 9Tration 3 U The OPPO^W« of Multinational Operations, 7
1 2 rt^f ™ Vm0 3l;blde S Bh°pal °iSaSter 5 Multinational Investment Opportunities, 8
1.2 The Challengesof Multinational Operations, 5 Multinational Financing Opportunities 0
ÄJfjT?,? 1 DiffereDCeS 5 Multinational Opportunitiefand Firm Value, 12
Man, Jn^h ? ^ /u ¦ L4 Financial Management of the MNC, 13
Managing the Costs Risks of Multinational Ops, 7 1.5 Summary, 14
_ Appendix 1-A The World s Largest Corporations, 15
Chapter 2 World Trade and the InteTnationaT^lonetaiySystem ~ 17
21 ZStor^tl7°fd^kT 11 2A A Brief Historyof the Int lMonetary System, 25
2.2 £EXSS2T Markets 20 ?change Rates after the fal1 of Bretton Woods 27
2.3 Exchange Rate^ystems S 2.5 sümmar^ 3? ** ^^ ^ ° ^ MF
Chapter 3 Foreign Exchange and Eurocurrency Markets 37
3.1 Characteristics of Financial Markets 37 ? a c • ^ ,
3.2 The Eurocurrency Markefss ^ ^f Exchange Rates and Quotations, 48
An Absence of Government Interference 41 Tu° ^ ** D,ealmg Wi* F°reign EXChangC 48
Floating-Rate Pricing 41 lnterterence 41 T^ notat.on used m Multinational Finance, 49
Interest RatP= in tw . n a- o r Foreign Exchange Quotation Conventions, 50
5ssr?f iret ETmTencyMarkets 4i Forwardpremjums^Disc°«nt« 52
SuLmerf46 F°relgn EXChange ^ ^ 46 Chan^s in Excha«ge «-»- «
^^^iency^hekreigr^F^^^ 47 3.g Summl^ EXCha ge ^ V° atllity *
Chapter 4 The International Parity Conditions 61
4.1 TheLawofOnePrice,61 . c T. D , n ,
Arbitrage Profit 61 The Real Exchange Rate, 74
Transactions Co sts and the No-Arbhrage Cond.tion, 62 ^^ÄS^1^ ?
4.2 Exchange Rate Equilibrium 63 txcnange Kate, 75
Bilateral Exchan«. fi!T vu ¦ . APPLICATION Keeping Track of Currency Units, 77
C Ss RatefandTri^l Ä h r 1 * Locational Arbitra8e « The Effect of a Change in the Real Exchange Rate, 77
aS^SISÄÄTr h- p MARKET UPDATE The International CostofLiving, 78
4 3 Interest Ra eTJx^lTr h d ng Emi 6S APPLICATION Efficient Markets the Professor, 79
Co^ZTL^lf ImereSt Arbitra§e 66 46 Excha ^ Ra* F—ing, 79
APPLICATION Arhitraop onH m v i r. Forecasts Based on the International Parity Conditions, 79
Relative Purchasing Power Paritv » Appendix 4-A Continuous Compounding, 86
Forward Rate« ac Pr .^;^»^ fc „ Continuously Compounded Rates of Retum, 86
The Zt^SZ Ffstr Sfo„T ^ ** ?° International Paritv Conditions in Continuous Time, 87
Uncovered Interest Paritv 73 ReaI Exchan8e Rates in Continuous Time, 87
——_____ Summary, 88
XV
PART TWO Derivative Securities for Financial Risk Management 89
Chapter 5 Currency Futures and Futures Markets 91
5.1 Financial Futures Exchanges, 91 MARKET UPDATE Competition between Exchanges, 98
5.2 The Operation of Futures Markets, 93 Futures Market Hedges, 99
Looking Good, Billy Ray! Feeling Good, Louis! 93 Forwards versus Futures: Vivo la Difförence, 99
Forces Moving the Futures Markets, 94 Standardized or Customized: Which Do You Choose? 101
5.3 Futures Contracts, 94 5.5 Futures Hedges Using Cross Exchange Rates, 101
Forward Contracts and Default Risk, 94 5.6 Hedging with Currency Futures, 102
The Futures Contract Solution, 94 Marurity Mismatches and Delta Hedges, 102
APPLICATION Price Limits, 96 The Basis Risk of a Delta Hedge, 103
A Futures Contract as a Portfolio of One-Day Forwards, 96 MARKET UPDATE MG s Oil Futures Hedge, 106
5.4 Forward versus Futures Market Hedges, 96 Futures Hedging Using the Hedge Ratio, 106
Exposure to Currency Risk and Currency Risk Profiles, 97 Cross Hedges and Delta-Cross Hedges, 108
Forward Market Hedges, 97 5.7 Summary, 109
Chapter 6 Currency Options and Options Markets 113
6.1 What Is an Option? 113 Dynamic Hedging Strategies with Rebalancing, 128
Types of Currency Options, 113 Combinations of Options, 129
Markets in Currency Options, 114 6.5 Exchange Rate Volatility Revisited (Advanced), 130
6.2 Option Payoff Profiles, 116 Continuous Compounding the Normal Distribution, 130
A Zero-Sum Game, 116 Historical Volatility, 131
Profit and Loss on a Currency Option at Expiration, 117 Implied Volatility, 133
At-the-Money Options and Asset Pricing Relations, 119 A Cautionary Note on Implied Volatilities, 133
6.3 Currency Options Values Prior to Expiration, 122 Volatility and Probability of Exercise, 134
The Intrinsic Value of an Option, 123 Time-Varying Volatility, 135
The Time Value of an Option, 124 6.6 Summary, 135
APPLICATION An Application of Put-Call Parity, 126 Appendix 6-A Currency Option Valuation, 139
6.4 Hedging with Currency Options, 126 The Binomial Option Pricing Model, 139
Static Hedging Strategies that Match on Expiration, 126 Currency Option Pricing, 143
Chapter 7 Currency Swaps and Swaps Markets 147
7.1 Parallel Loans: Necessity Is the Mother of Invention, 147 APPLICATION Finding the All-In Cost
Alternative # 1: Borrow Foreign Currency, 148 of a Currency Coupon Swap, 159
Alternative #2: A Parallel Loan, 149 7.6 Interest Rate Swaps, 161
7.2 Pros and Cons of Parallel Loans, 151 An Example of an Interest Rate Swap, 162
The Benefits of Parallel Loans, 151 Combinations of Currency and Interest Rate Swaps, 164
Problems with Parallel Loans, 151 APPLICATION Risk Management at Altria Group, 164
7.3 Swaps to the Rescue, 151 7.7 Other Types of Swaps, 165
7.4 Swaps as Portfolios of Forward Contracts, 153 Credit Derivatives, 166
7.5 Currency Swaps, 154 Equity Swaps, 166
A Note on Day Count Conventions, 156 Commodity Swaps, 167
An Example of a Currency Coupon Swap, 156 7.8 Hedging the Swap Bank s Exposure, 167
7.9 Summary, 167
PART THREE Managing the Risks of Multinational Operations 171
Chapter 8 The Rationale for Hedging Currency Risk 173
8.1 A Perfect Model for an Imperfect World, 173 Indirect Costs of Financial Distress, 183
8.2 When Hedging Adds Value, 174 The Value of Distress-Related Incentives to Hedge, 186
8.3 Convexity in the Tax Schedule, 176 8.5 Agency Costs, 186
Tax Preference Items, 176 Conflicts of Interest between Managers
Progressive Taxation, 177 Other Stakeholders, 186
The Value of Tax Incentives to Hedge, 179 Managemente Incentive to Hedge, 187
8.4 Costs of Financial Distress, 179 Hedging and tbe Shareholder-Manager Relationship, 187
Equity as a Call Option on Firm Value, 179 8.6 Market Imperfections and the Hedging Decision, 188
Direct Costs of Financial Distress, 181 8.7 Summary, 188
xvi
Chapter 9 Treasury Management of International Transactions 193
9.1 Determining the Firm s Financial Goals and Strategies, 193 Cash Management, 205
The MNC s Strategie Business Plan, 193 Managing Intemal and External Relations, 205
Financial Strategy as a Complement to the Business Plan, 194 9.5 Currency Risk Management in the MNC, 206
9.2 Managing the Corporation s International Trade, 194 Exposure to Currency Risk, 206
The Legal Environment, 195 MARKET UPDATE Views on FX Risk Exposures, 209
Managing the Costs Risks of International Shipping, 195 A Forward Hedge of a Currency Risk Exposure, 209
Managing the Costs Risks of International Payments, 196 The 5 Steps of a Currency Risk Management Program, 212
Countertrade, 200 Formulating a Risk Management Policy:
9.3 Financing the Corporation s International Trade, 201 To Hedge or Not to Hedge, 213
The Exporter s Perspective, 201 APPLICATION Currency Risk Management at Ford, 214
The Importer s Perspective, 203 MARKET UPDATE Barings Bank, 215
The All-In Cost of Export Financing, 204 Derivatives Usage by U.S. Corporations, 216
9.4 Managing the Multinational Corporation s Cash Flows, 204 9.6 Summary, 216
Chapter 10 Managing Transaction Exposure to Currency Risk 219
10.1 An Example of Transaction Exposure to Currency Risk, 219 Hedging with Currency Futures, 228
An Imaginary Tale, 219 Money Market Hedges, 229
A Real-World Example, 219 Hedging with Currency Swaps, 230
MARKET UPDATE Risk Assessment with RiskMetrics, 220 Hedging with Currency Options, 231
10.2 Managing Transaction Exposures Internally, 220 10.4 Treasury Management in Practice, 232
Multinational Netting, 221 Derivatives Usage, 232
Leading and Lagging, 222 Active Management of Currency Risk, 233
10.3 Managing Transaction Exposure in Financial Markets, 226 MARKET UPDATE JPMorgan s
APPLICATION FX Losses at Japan Air Lines, 227 Event Risk Indicator, 236
Hedging with Currency Forwards, 227 10.5 Summary, 236
Chapter 11 Managing Operating Exposure to Currency Risk 241
11.1 Operating Exposures to Currency Risk, 241 Assessing the Effectiveness of a Financial Hedge, 252
Operating Exposure and the Competitive Environment, 241 11.4 Managing Operating Exposure through Operations, 252
Measuring the Exposure of Operating Cash Flows, 242 Types of Operational Hedges, 253
11.2 The Exposure of Shareholders Equity, 244 Combining Operational and Financial Hedges, 253
An Illustration of an Exporter s Exposures, 244 11.5 Pricing Strategy and the Competitive Environment, 254
Market-Based Measures of the Exposure of Equity, 245 An Example of an Exporter s Operating Exposure, 254
APPLICATION Daimler s Seil-Off of Chrysler, 248 Alternative Pricing Strategies, 255
An Insider s View of Operating Exposure, 248 Pricing Strategy and the Price Elasticity of Demand, 256
11.3 Managing Operating Exposure in the Financial Markets, 248 The Consequences of Alternative Pricing Strategies, 256
Financial Market Hedging Alternatives, 248 Reprise, 257
Advantages/Disadvantages of Financial Market Hedges, 249 11.6 Summary, 257
Chapter 12 Managing Translation Exposure and Accounting for Financial Transactions 261
12.1 Measuring Translation Exposure, 261 MARKET UPDATE Some (In)Famous
The Current/Noncurrent Method in Use Prior to 1976, 262 Derivatives-Related Losses, 270
MARKET UPDATE Int l Accounting Standards, 263 12.4 Accounting for Financial Market Transactions, 270
The Temporal Method of FAS #8 (11276-11282), 263 Derivatives Should Be Reported, 271
The Current Rate Method of FAS #52 (11282-present), 264 Use of Fair (Market) Value, 271
12.2 Which Translation Method Is the Most Realistic? 265 Assets Liabilities Should Be on the Balance Sheet, 272
12.3 Corporate Hedging of Translation Exposure, 266 Accounting for Hedge Transactions, 272
Information-Based Reasons 12.5 Accounting, Disclosure, Corp Hedging Activities, 274
for Hedging Translation Exposure, 267 Accounting Disclosure and Adverse Selection, 274
Cross-Country Differences in the Hedging The Value-Relevance of Derivatives Disclosures, 275
of Translation Exposure, 268 The Impact of FAS # 133 on Corp Hedging Activities, 276
Ahgmng Managerial Incentives with S/h Objectives, 268 12.6 Summary, 276
To Hedge or Not to Hedge: Policy Recommendations, 269
xvii
PART FOUR Valuation and the Structure of Multinational Operations 283
Chapter 13 Foreign Market Entry and Country Risk Management 285
13.1 Strategie Entry into International Markets, 285 MARKET UPDATE Political Risk in Indonesia, 298
Export-Based Foreign Market Entry, 286 Negotiating the Environment, 298
Import-Based Foreign Market Entry, 287 Political Risk Insurance, 299
Contract-Based Foreign Market Entry, 288 Political Risk and the Structure of Foreign Operations, 302
Investment-Based Foreign Market Entry, 288 Planning for Disaster Recovery, 303
Foreign Market Entry through a Strategie Alliance, 290 13.4 Protecting the MNC s Competitive Advantages, 303
13.2 Country Risk Assessment, 291 Intellectual Property Rights, 303
Political Risk, 293 MARKET UPDATE Creating and Maintaining
MARKET UPDATE Political Risk in the United States: Competitive Advantage at Merck, 304
California s Unitary Tax, 294 MARKET UPDATE Modern Pirates of the High Seas, 305
Financial Risk, 294 Loss of Competitive Advantage, 305
Specific Types of Country Risk, 295 Finding the Right Partner Managing the Relation, 306
13.3 Strategies for Managing Country Risk, 297 13.5 Summary, 306
Chapter 14 Cross-Border Capital Budgeting 309
14.1 The Algebra of Cross-Border Investment Analysis, 309 14.4 Special Circumstances in Cross-Border Investments, 321
The Domestic Capital Budgeting Recipe, 309 Blocked Funds, 322
Int l Parity Conditions and Cross-Border Capital Budgeting, 310 Subsidized Financing, 324
14.2 An Example: Wendy s Restaurant in Neverland, 311 Negative-NPV Tie-in Projects, 325
Recipe # 1: Discounting in the Foreign Currency, 313 Political Risk, 325
Recipe #2: Discounting in the Domestic Currency, 314 Tax Holidays, 326
14.3 Disequilibria in the International Parity Conditions, 315 The Value of Knowing the Value
The Parent versus Project Perspective on Project Valuation, 315 of a Project s Side Effects, 326
How to Handle Valuation Differences, 317 14.5 Summary, 326
Chapter 15 Multinational Capital Structure and Cost of Capital 331
15.1 Capital Structure and the Cost of Capital, 331 MARKET UPDATE The Required Return
Capital Structure Theory and Practice, 331 on Investments in India, 343
Cost of Capital Theory and Practice, 333 Estimating the Cost of Capital in an Emerging Market, 344
15.2 Project Valuation and the Cost of Capital, 334 15.4 Sources of Funds for Multinational Operations, 345
The WACC Approach to Project Valuation, 335 Internal Sources of Funds, 346
APPLICATION Project Valuation External Sources of Funds, 346
Using the WACC at Philips NV, 339 MARKET UPDATE Novo Industri s
The APV Approach to Project Valuation, 340 International Sources of Funds, 348
APPLICATION Project Valuation Using APV MARKET UPDATE Project Finance Thru the Ages, 350
at Philips NV, 341 15.5 The International Evidence on Capital Structure, 350
15.3 The Cost of Capital on Multinational Operations, 341 Evidence from Developed Capital Markets, 351
Total Versus Systematic Risk, 341 Evidence from Emerging Capital Markets, 352
Returns and Risks in Emerging Markets, 342 15.6 Summary, 353
XV1I1
Chapter 16 Taxes and Multinational Corporate Strategy 359
16.1 The Objectives of National Tax Policy, 359 MARKET UPDATE Wal-Mart s Advance Pricing
Tax Neutrality: A Level Playing Field, 359 Agreement with the IRS and China, 370
Violations of Tax Neutrality, 360 16.5 Transfer Pricing and Tax Planning, 370
16.2 Types of Taxation, 360 An Example, 3 71
National Taxes on Foreign-Source Income, 360 Transfer Price Planning, 371
Explicit Versus Implicit Taxes, 361 16.6 Taxes and the Location of Foreign Assets Liabilities, 372
16.3 U.S. Taxation of Foreign-Source Income, 363 Effect of Shifting Operations to Low-Tax Jurisdictions, 372
Foreign Tax Credits and FTC Limitations, 364 Taxes and the Location of Treasury Operations, 373
MARKET UPDATE La Mordida - The Little Bite , 366 Taxes and the Use of Debt in Cross-Border Investment, 374
Other Limitations on Foreign Tax Credits, 367 Taxes and the Acquisition of Foreign Assets, 375
16.4 Taxes and Organizational Form, 368 16.7 Summary, 376
Chapter 17 Real Options and Cross-Border Investment Strategy 379
17.1 Types of Options, 379 Exogenous Uncertainty, 388
Compound Options and Rainbow Options, 379 17.5 Puzzle #2: Market Exit and the Abandonment Option, 390
17.2 The Theory and Practice of Investment, 380 An Example of the Abandonment Option, 390
The Conventional Theory of Investment, 380 A Resolution of Puzzle #2: Failure to Abandon
Three Puzzles, 380 Unprofitable Investments, 392
Managerial Flexibility in the Timing, Scale, Investment/Disinvestment Strategies in Combination, 393
and Scope of Investment, 381 17.6 Puzzle #3: The MNC s Entry into New Markets, 394
17.3 Puzzle #1: Market Entry and the Option to Invest, 382 Endogenous Uncertainty and Follow-Up Projects, 394
An Option to Invest in a Natural Resource Project, 382 A Resolution of Puzzle #3: The MNC s Market Entry, 396
An Example of the Option to Invest, 382 17.7 The Real Option Approach as a Complement to NPV, 396
The Value of the Option to Invest, 383 Why NPV Has Difficulty Valuing Flexibility, 397
A Resolution of Puzzle #1: Use of Inflated Hurdle Rates, 387 The Option Pricing Alternative, 398
17.4 Uncertainty and the Value of the Option to Invest, 387 The Real Option Approach and NPV as Complements, 398
The Determinants of Option Value, 387 17.8 Summary, 399
Chapter 18 Corporate Governance and the International Market for Corporate Control 405
18.1 The Terminology of Mergers and Acquisitions, 406 18.4 The International Evidence on M A, 422
18.2 Corporate Govemance, 407 The Winners and Losers, 422
Examples of Corporate Governance Systems, 408 Firm Performance and Top Executive Turnover, 425
MARKET UPDATE Korea s Chaebol, 411 Tunneling and the Value of Corporate
Characteristics of Corporate Governance Systems, 414 Control Benefits, 427
18.3 The International Market for Corporate Control, 417 The Benefits and Costs
A Recent History of Cross-Border M A Activity, 417 of Cross-Border Diversification, 427
Hostile Acquisitions, 418 A Caveat, 428
Privatization of State-Owned Enterprises, 419 18.5 Summary, 428
xix
PART FIVE International Portfolio Investment and Asset Pricing 435
Chapter 19 International Capital Markets 437
19.1 Domestic and International Bond Markets, 437 Index Derivatives, 451
Domestic Bonds - When in Rome .. . , 438 19.4 Share Prices in International Markets, 452
Foreign Bonds - Strangers in a Strange Land, 441 Share Prices in Segmented Markets, 452
Eurobonds - Necessity Is the Mother of Invention, 441 MARKET UPDATE Mark Mobius
Global Bonds, 442 and Templeton Investments, 453
19.2 Domestic and International Stock Markets, 442 The Effect of Global Listings on Share Prices, 454
Capital Market Integration and Global Competition, 443 The Effectiveness of Homemade Int l Diversification, 455
MARKET UPDATE Share Classes in China, 445 19.5 Asset Allocation Policy and Investment Style, 455
Institutional Differences in Stock Exchange Operations, 445 Passive Fund Management, 456
MARKET UPDATE The Growth of Online Brokers, 446 Active Fund Management, 456
International Differences in Securities Regulation, 446 19.6 Cross-Border Financial Statement Analysis, 458
19.3 International Investment Vehicles, 448 Differences in Financial Accounting Measurement, 459
Invest in Individual Foreign Securities, 448 International Differences in Financial Disclosure, 460
MARKET UPDATE The Debt of Developing Countries, 449 19.7 Summary, 461
Professionally Managed Funds of Int l Assets, 450 Appendix 19-A Tracking an Int l Investment Portfolio, 465
Chapter 20 International Portfolio Diversification 467
20.1 The Algebra of Portfolio Diversification, 467 Diversifying with International Equity Investments, 481
The Mean-Variance Framework, 467 MARKET UPDATE Contracts in Hi-lnflation Countries, 482
The Expected Return on a Portfolio, 468 Diversifying with International Bond Investments, 482
The Risk of a Two-Asset Portfolio, 469 Diversifying with International Stocks and Bonds, 482
Portfolios of Many Securities, 472 The Benefits of Hedging Currency Risk, 483
Mean-Variance Efficiency, 473 20.4 Home Bias, 483
20.2 Returns on Foreign Investments, 475 Explanations Based on Int l Asset Pricing Models, 484
Expected Return on a Foreign Asset, 476 Explanations Based on Imperfect Markets, 485
Variance of Return on a Foreign Asset, 476 20.5 Summary, 488
The Shifting Sands of Portfolio Analysis, 479 Appendix 20-A Continuous Compounding Distributions, 493
Time-Varying Expected Returns and Volatilities, 479 Returns to an Emerging Stock Market, 493
Correlations between National Stock Markets, 480 Observed Returns Relative to the Normal Distribution, 494
20.3 The Benefits of International Portfolio Diversification, 481 Measures, Correlations, Betas, and Risk, 495
Chapter 21 International Asset Pricing 499
21.1 The International Capital Asset Pricing Model (IAPM), 499 21.4 Momentum Strategies, 509
The Traditional Capital Asset Pricing Model (CAPM), 499 The U.S. Evidence, 509
The International Asset Pricing Model (IAPM), 502 The International Evidence, 510
APPLICATION Job Interviews, 503 Rational Asset Pricing or Irrational Investor Behavior? 511
21.2 Factor Models and Arbitrage Pricing Theory (APT), 503 21.4 The Currency Risk Factor in Stock Returns, 511
MARKET UPDATE The Relevance of Market Indices, 505 Portfolio Theory and the Irrelevance of Hedging
21.3 Factor Models for Pricing International Assets, 505 in a Perfect World, 511
Macroeconomic Factors Associated Measuring Currency Risk Exposure, 512
with Domestic Stock Returns, 505 Is Currency Risk Priced in Financial Markets? 513
APPLICATION An Example of Arbitrage Pricing, 506 Currency Risk Exposure and MNC Hedging Activities, 514
Global versus Country versus Industry Factors, 506 21.5 Summary, 515
The International Value Premium, 507
|
| adam_txt |
Preface vii
Tableof Contents xiii
Detailed Table of Contents xiv
The International Financial Environment 1
Chapter 1 An Introduction to Multinational Finance 3
Chapter 2 World Trade and the International Monetary System 17
Chapter 3 Foreign Exchange and Eurocurrency Markets 37
Chapter 4 The International Parity Conditions 61
Derivative Securities for Financial Risk Management 89
Chapter 5 Currency Futures and Futures Markets 91
Chapter 6 Currency Options and Options Markets 113
Chapter 7 Currency Swaps and Swaps Markets 147
Managing the Risks of Multinational Operations 171
Chapter 8 The Rationale for Hedging Currency Risk 173
Chapter 9 Treasury Management of International Transactions 193
Chapter 10 Managing Transaction Exposure to Currency Risk 219
Chapter 11 Managing Operating Exposure to Currency Risk 241
Chapter 12 Managing Translation Exposure
and Accounting for Financial Transactions 261
Valuation and the Structure of Multinational Operations 283
Chapter 13 Foreign Market Entry and Country Risk Management 285
Chapter 14 Cross-Border Capital Budgeting 309
Chapter 15 Multinational Capital Structure and Cost of Capital 331
Chapter 16 Taxes and Multinational Corporate Strategy 359
Chapter 17 Real Options and Cross-Border Investment Strategy 379
Chapter 18 Corporate Governance
and the International Market for Corporate Control 405
International Portfolio Investment and Asset Pricing 435
Chapter 19 International Capital Markets 437
Chapter 20 International Portfolio Diversification 467
Chapter 21 International Asset Pricing 499
Glossary 523
Solutions to Even-Numbered Problems 537
Name Index 559
Subject Index 565
Addenda 581
xiv
Contents in Detail
PART ONE The International Financial Environment
Chapter 1 An Introduction to Multinational Finance j
U ™fRGK°S upnATp'H'^r31 9Tration' 3 U The OPPO^W« of Multinational Operations, 7
1 2 rt^f ™ Vm0" 3l;blde S Bh°pal °iSaSter' 5 Multinational Investment Opportunities, 8
1.2 The Challengesof Multinational Operations, 5 Multinational Financing Opportunities 0
ÄJfjT?,?"1 DiffereDCeS' 5 Multinational Opportunitiefand Firm Value, 12
Man, Jn^h ? ^ /u ¦ L4 Financial Management of the MNC, 13
Managing the Costs Risks of Multinational Ops, 7 1.5 Summary, 14
_ Appendix 1-A The World's Largest Corporations, 15
Chapter 2 World Trade and the InteTnationaT^lonetaiySystem ~ 17
21 ZStor^tl7°fd^kT'11 2A A Brief Historyof the Int'lMonetary System, 25
2.2 £EXSS2T Markets'20 ?change Rates after the fal1 of Bretton Woods'27
2.3 Exchange Rate^ystems'S 2.5 sümmar^ 3?" ** ^^ ^ °'^ MF ''
Chapter 3 Foreign Exchange and Eurocurrency Markets 37
3.1 Characteristics of Financial Markets 37 ? a c • ^ ,
3.2 The Eurocurrency Markefss ^ ^f Exchange Rates and Quotations, 48
An Absence of Government Interference 41 Tu° ^ ** D,ealmg Wi* F°reign EXChangC' 48
Floating-Rate Pricing 41 lnterterence' 41 T^ notat.on used m Multinational Finance, 49
Interest RatP= in tw' . n a- o r Foreign Exchange Quotation Conventions, 50
5ssr?f iret ETmTencyMarkets'4i Forwardpremjums^Disc°«nt«'52
SuLmerf46 F°relgn EXChange ^'^ 46 Chan^s in Excha«ge «-»- «
^^^iency^hekreigr^F^^^ 47 3.g Summl^ EXCha"ge ^ V°'atllity *
Chapter 4 The International Parity Conditions 61
4.1 TheLawofOnePrice,61 . c T. D , n ,
Arbitrage Profit 61 The Real Exchange Rate, 74
Transactions Co'sts and the No-Arbhrage Cond.tion, 62 ^^ÄS^1^"' ?'
4.2 Exchange Rate Equilibrium 63 txcnange Kate, 75
Bilateral Exchan«. fi!T' vu ¦ . APPLICATION Keeping Track of Currency Units, 77
C Ss RatefandTri^l 'Ä h r"1 * Locational Arbitra8e' « The Effect of a Change in the Real Exchange Rate, 77
aS^SISÄÄTr h- p MARKET UPDATE The International CostofLiving, 78
4 3 Interest Ra eTJx^lTr h "d'ng Emi' 6S APPLICATION Efficient Markets the Professor, 79
Co^ZTL^lf ImereSt Arbitra§e' 66 46 Excha"^ Ra* F—ing, 79
APPLICATION Arhitraop'onH m v i r. Forecasts Based on the International Parity Conditions, 79
Relative Purchasing Power Paritv » Appendix 4-A Continuous Compounding, 86
Forward Rate« ac Pr .^;^»^ fc „ Continuously Compounded Rates of Retum, 86
The Zt^SZ Ffstr Sfo„T ^ **"' ?° International Paritv Conditions in Continuous Time, 87
Uncovered Interest Paritv 73 ' ReaI Exchan8e Rates in Continuous Time, 87
——_ Summary, 88
XV
PART TWO Derivative Securities for Financial Risk Management 89
Chapter 5 Currency Futures and Futures Markets 91
5.1 Financial Futures Exchanges, 91 MARKET UPDATE Competition between Exchanges, 98
5.2 The Operation of Futures Markets, 93 Futures Market Hedges, 99
Looking Good, Billy Ray! Feeling Good, Louis! 93 Forwards versus Futures: Vivo la Difförence, 99
Forces Moving the Futures Markets, 94 Standardized or Customized: Which Do You Choose? 101
5.3 Futures Contracts, 94 5.5 Futures Hedges Using Cross Exchange Rates, 101
Forward Contracts and Default Risk, 94 5.6 Hedging with Currency Futures, 102
The Futures Contract Solution, 94 Marurity Mismatches and Delta Hedges, 102
APPLICATION Price Limits, 96 The Basis Risk of a Delta Hedge, 103
A Futures Contract as a Portfolio of One-Day Forwards, 96 MARKET UPDATE MG's Oil Futures Hedge, 106
5.4 Forward versus Futures Market Hedges, 96 Futures Hedging Using the Hedge Ratio, 106
Exposure to Currency Risk and Currency Risk Profiles, 97 Cross Hedges and Delta-Cross Hedges, 108
Forward Market Hedges, 97 5.7 Summary, 109
Chapter 6 Currency Options and Options Markets 113
6.1 What Is an Option? 113 Dynamic Hedging Strategies with Rebalancing, 128
Types of Currency Options, 113 Combinations of Options, 129
Markets in Currency Options, 114 6.5 Exchange Rate Volatility Revisited (Advanced), 130
6.2 Option Payoff Profiles, 116 Continuous Compounding the Normal Distribution, 130
A Zero-Sum Game, 116 Historical Volatility, 131
Profit and Loss on a Currency Option at Expiration, 117 Implied Volatility, 133
At-the-Money Options and Asset Pricing Relations, 119 A Cautionary Note on Implied Volatilities, 133
6.3 Currency Options Values Prior to Expiration, 122 Volatility and Probability of Exercise, 134
The Intrinsic Value of an Option, 123 Time-Varying Volatility, 135
The Time Value of an Option, 124 6.6 Summary, 135
APPLICATION An Application of Put-Call Parity, 126 Appendix 6-A Currency Option Valuation, 139
6.4 Hedging with Currency Options, 126 The Binomial Option Pricing Model, 139
Static Hedging Strategies that Match on Expiration, 126 Currency Option Pricing, 143
Chapter 7 Currency Swaps and Swaps Markets 147
7.1 Parallel Loans: Necessity Is the Mother of Invention, 147 APPLICATION Finding the All-In Cost
Alternative # 1: Borrow Foreign Currency, 148 of a Currency Coupon Swap, 159
Alternative #2: A Parallel Loan, 149 7.6 Interest Rate Swaps, 161
7.2 Pros and Cons of Parallel Loans, 151 An Example of an Interest Rate Swap, 162
The Benefits of Parallel Loans, 151 Combinations of Currency and Interest Rate Swaps, 164
Problems with Parallel Loans, 151 APPLICATION Risk Management at Altria Group, 164
7.3 Swaps to the Rescue, 151 7.7 Other Types of Swaps, 165
7.4 Swaps as Portfolios of Forward Contracts, 153 Credit Derivatives, 166
7.5 Currency Swaps, 154 Equity Swaps, 166
A Note on Day Count Conventions, 156 Commodity Swaps, 167
An Example of a Currency Coupon Swap, 156 7.8 Hedging the Swap Bank's Exposure, 167
7.9 Summary, 167
PART THREE Managing the Risks of Multinational Operations 171
Chapter 8 The Rationale for Hedging Currency Risk 173
8.1 A Perfect Model for an Imperfect World, 173 Indirect Costs of Financial Distress, 183
8.2 When Hedging Adds Value, 174 The Value of Distress-Related Incentives to Hedge, 186
8.3 Convexity in the Tax Schedule, 176 8.5 Agency Costs, 186
Tax Preference Items, 176 Conflicts of Interest between Managers
Progressive Taxation, 177 Other Stakeholders, 186
The Value of Tax Incentives to Hedge, 179 Managemente Incentive to Hedge, 187
8.4 Costs of Financial Distress, 179 Hedging and tbe Shareholder-Manager Relationship, 187
Equity as a Call Option on Firm Value, 179 8.6 Market Imperfections and the Hedging Decision, 188
Direct Costs of Financial Distress, 181 8.7 Summary, 188
xvi
Chapter 9 Treasury Management of International Transactions 193
9.1 Determining the Firm's Financial Goals and Strategies, 193 Cash Management, 205
The MNC's Strategie Business Plan, 193 Managing Intemal and External Relations, 205
Financial Strategy as a Complement to the Business Plan, 194 9.5 Currency Risk Management in the MNC, 206
9.2 Managing the Corporation's International Trade, 194 Exposure to Currency Risk, 206
The Legal Environment, 195 MARKET UPDATE Views on FX Risk Exposures, 209
Managing the Costs Risks of International Shipping, 195 A Forward Hedge of a Currency Risk Exposure, 209
Managing the Costs Risks of International Payments, 196 The 5 Steps of a Currency Risk Management Program, 212
Countertrade, 200 Formulating a Risk Management Policy:
9.3 Financing the Corporation's International Trade, 201 To Hedge or Not to Hedge, 213
The Exporter's Perspective, 201 APPLICATION Currency Risk Management at Ford, 214
The Importer' s Perspective, 203 MARKET UPDATE Barings Bank, 215
The All-In Cost of Export Financing, 204 Derivatives Usage by U.S. Corporations, 216
9.4 Managing the Multinational Corporation's Cash Flows, 204 9.6 Summary, 216
Chapter 10 Managing Transaction Exposure to Currency Risk 219
10.1 An Example of Transaction Exposure to Currency Risk, 219 Hedging with Currency Futures, 228
An Imaginary Tale, 219 Money Market Hedges, 229
A Real-World Example, 219 Hedging with Currency Swaps, 230
MARKET UPDATE Risk Assessment with RiskMetrics, 220 Hedging with Currency Options, 231
10.2 Managing Transaction Exposures Internally, 220 10.4 Treasury Management in Practice, 232
Multinational Netting, 221 Derivatives Usage, 232
Leading and Lagging, 222 Active Management of Currency Risk, 233
10.3 Managing Transaction Exposure in Financial Markets, 226 MARKET UPDATE JPMorgan's
APPLICATION FX Losses at Japan Air Lines, 227 Event Risk Indicator, 236
Hedging with Currency Forwards, 227 10.5 Summary, 236
Chapter 11 Managing Operating Exposure to Currency Risk 241
11.1 Operating Exposures to Currency Risk, 241 Assessing the Effectiveness of a Financial Hedge, 252
Operating Exposure and the Competitive Environment, 241 11.4 Managing Operating Exposure through Operations, 252
Measuring the Exposure of Operating Cash Flows, 242 Types of Operational Hedges, 253
11.2 The Exposure of Shareholders' Equity, 244 Combining Operational and Financial Hedges, 253
An Illustration of an Exporter's Exposures, 244 11.5 Pricing Strategy and the Competitive Environment, 254
Market-Based Measures of the Exposure of Equity, 245 An Example of an Exporter's Operating Exposure, 254
APPLICATION Daimler's Seil-Off of Chrysler, 248 Alternative Pricing Strategies, 255
An Insider's View of Operating Exposure, 248 Pricing Strategy and the Price Elasticity of Demand, 256
11.3 Managing Operating Exposure in the Financial Markets, 248 The Consequences of Alternative Pricing Strategies, 256
Financial Market Hedging Alternatives, 248 Reprise, 257
Advantages/Disadvantages of Financial Market Hedges, 249 11.6 Summary, 257
Chapter 12 Managing Translation Exposure and Accounting for Financial Transactions 261
12.1 Measuring Translation Exposure, 261 MARKET UPDATE Some (In)Famous
The Current/Noncurrent Method in Use Prior to 1976, 262 Derivatives-Related Losses, 270
MARKET UPDATE Int'l Accounting Standards, 263 12.4 Accounting for Financial Market Transactions, 270
The Temporal Method of FAS #8 (11276-11282), 263 Derivatives Should Be Reported, 271
The Current Rate Method of FAS #52 (11282-present), 264 Use of Fair (Market) Value, 271
12.2 Which Translation Method Is the Most Realistic? 265 Assets Liabilities Should Be on the Balance Sheet, 272
12.3 Corporate Hedging of Translation Exposure, 266 Accounting for Hedge Transactions, 272
Information-Based Reasons 12.5 Accounting, Disclosure, Corp Hedging Activities, 274
for Hedging Translation Exposure, 267 Accounting Disclosure and Adverse Selection, 274
Cross-Country Differences in the Hedging The Value-Relevance of Derivatives Disclosures, 275
of Translation Exposure, 268 The Impact of FAS # 133 on Corp Hedging Activities, 276
Ahgmng Managerial Incentives with S/h Objectives, 268 12.6 Summary, 276
To Hedge or Not to Hedge: Policy Recommendations, 269
xvii
PART FOUR Valuation and the Structure of Multinational Operations 283
Chapter 13 Foreign Market Entry and Country Risk Management 285
13.1 Strategie Entry into International Markets, 285 MARKET UPDATE Political Risk in Indonesia, 298
Export-Based Foreign Market Entry, 286 Negotiating the Environment, 298
Import-Based Foreign Market Entry, 287 Political Risk Insurance, 299
Contract-Based Foreign Market Entry, 288 Political Risk and the Structure of Foreign Operations, 302
Investment-Based Foreign Market Entry, 288 Planning for Disaster Recovery, 303
Foreign Market Entry through a Strategie Alliance, 290 13.4 Protecting the MNC's Competitive Advantages, 303
13.2 Country Risk Assessment, 291 Intellectual Property Rights, 303
Political Risk, 293 MARKET UPDATE Creating and Maintaining
MARKET UPDATE Political Risk in the United States: Competitive Advantage at Merck, 304
California's Unitary Tax, 294 MARKET UPDATE Modern Pirates of the High Seas, 305
Financial Risk, 294 Loss of Competitive Advantage, 305
Specific Types of Country Risk, 295 Finding the Right Partner Managing the Relation, 306
13.3 Strategies for Managing Country Risk, 297 13.5 Summary, 306
Chapter 14 Cross-Border Capital Budgeting 309
14.1 The Algebra of Cross-Border Investment Analysis, 309 14.4 Special Circumstances in Cross-Border Investments, 321
The Domestic Capital Budgeting Recipe, 309 Blocked Funds, 322
Int'l Parity Conditions and Cross-Border Capital Budgeting, 310 Subsidized Financing, 324
14.2 An Example: Wendy's Restaurant in Neverland, 311 Negative-NPV Tie-in Projects, 325
Recipe # 1: Discounting in the Foreign Currency, 313 Political Risk, 325
Recipe #2: Discounting in the Domestic Currency, 314 Tax Holidays, 326
14.3 Disequilibria in the International Parity Conditions, 315 The Value of Knowing the Value
The Parent versus Project Perspective on Project Valuation, 315 of a Project's Side Effects, 326
How to Handle Valuation Differences, 317 14.5 Summary, 326
Chapter 15 Multinational Capital Structure and Cost of Capital 331
15.1 Capital Structure and the Cost of Capital, 331 MARKET UPDATE The Required Return
Capital Structure Theory and Practice, 331 on Investments in India, 343
Cost of Capital Theory and Practice, 333 Estimating the Cost of Capital in an Emerging Market, 344
15.2 Project Valuation and the Cost of Capital, 334 15.4 Sources of Funds for Multinational Operations, 345
The WACC Approach to Project Valuation, 335 Internal Sources of Funds, 346
APPLICATION Project Valuation External Sources of Funds, 346
Using the WACC at Philips NV, 339 MARKET UPDATE Novo Industri's
The APV Approach to Project Valuation, 340 International Sources of Funds, 348
APPLICATION Project Valuation Using APV MARKET UPDATE Project Finance Thru the Ages, 350
at Philips NV, 341 15.5 The International Evidence on Capital Structure, 350
15.3 The Cost of Capital on Multinational Operations, 341 Evidence from Developed Capital Markets, 351
Total Versus Systematic Risk, 341 Evidence from Emerging Capital Markets, 352
Returns and Risks in Emerging Markets, 342 15.6 Summary, 353
XV1I1
Chapter 16 Taxes and Multinational Corporate Strategy 359
16.1 The Objectives of National Tax Policy, 359 MARKET UPDATE Wal-Mart's Advance Pricing
Tax Neutrality: A Level Playing Field, 359 Agreement with the IRS and China, 370
Violations of Tax Neutrality, 360 16.5 Transfer Pricing and Tax Planning, 370
16.2 Types of Taxation, 360 An Example, 3 71
National Taxes on Foreign-Source Income, 360 Transfer Price Planning, 371
Explicit Versus Implicit Taxes, 361 16.6 Taxes and the Location of Foreign Assets Liabilities, 372
16.3 U.S. Taxation of Foreign-Source Income, 363 Effect of Shifting Operations to Low-Tax Jurisdictions, 372
Foreign Tax Credits and FTC Limitations, 364 Taxes and the Location of Treasury Operations, 373
MARKET UPDATE La Mordida - "The Little Bite", 366 Taxes and the Use of Debt in Cross-Border Investment, 374
Other Limitations on Foreign Tax Credits, 367 Taxes and the Acquisition of Foreign Assets, 375
16.4 Taxes and Organizational Form, 368 16.7 Summary, 376
Chapter 17 Real Options and Cross-Border Investment Strategy 379
17.1 Types of Options, 379 Exogenous Uncertainty, 388
Compound Options and Rainbow Options, 379 17.5 Puzzle #2: Market Exit and the Abandonment Option, 390
17.2 The Theory and Practice of Investment, 380 An Example of the Abandonment Option, 390
The Conventional Theory of Investment, 380 A Resolution of Puzzle #2: Failure to Abandon
Three Puzzles, 380 Unprofitable Investments, 392
Managerial Flexibility in the Timing, Scale, Investment/Disinvestment Strategies in Combination, 393
and Scope of Investment, 381 17.6 Puzzle #3: The MNC's Entry into New Markets, 394
17.3 Puzzle #1: Market Entry and the Option to Invest, 382 Endogenous Uncertainty and Follow-Up Projects, 394
An Option to Invest in a Natural Resource Project, 382 A Resolution of Puzzle #3: The MNC's Market Entry, 396
An Example of the Option to Invest, 382 17.7 The Real Option Approach as a Complement to NPV, 396
The Value of the Option to Invest, 383 Why NPV Has Difficulty Valuing Flexibility, 397
A Resolution of Puzzle #1: Use of Inflated Hurdle Rates, 387 The Option Pricing Alternative, 398
17.4 Uncertainty and the Value of the Option to Invest, 387 The Real Option Approach and NPV as Complements, 398
The Determinants of Option Value, 387 17.8 Summary, 399
Chapter 18 Corporate Governance and the International Market for Corporate Control 405
18.1 The Terminology of Mergers and Acquisitions, 406 18.4 The International Evidence on M A, 422
18.2 Corporate Govemance, 407 The Winners and Losers, 422
Examples of Corporate Governance Systems, 408 Firm Performance and Top Executive Turnover, 425
MARKET UPDATE Korea's Chaebol, 411 Tunneling and the Value of Corporate
Characteristics of Corporate Governance Systems, 414 Control Benefits, 427
18.3 The International Market for Corporate Control, 417 The Benefits and Costs
A Recent History of Cross-Border M A Activity, 417 of Cross-Border Diversification, 427
Hostile Acquisitions, 418 A Caveat, 428
Privatization of State-Owned Enterprises, 419 18.5 Summary, 428
xix
PART FIVE International Portfolio Investment and Asset Pricing 435
Chapter 19 International Capital Markets 437
19.1 Domestic and International Bond Markets, 437 Index Derivatives, 451
Domestic Bonds - "When in Rome . .", 438 19.4 Share Prices in International Markets, 452
Foreign Bonds - Strangers in a Strange Land, 441 Share Prices in Segmented Markets, 452
Eurobonds - Necessity Is the Mother of Invention, 441 MARKET UPDATE Mark Mobius
Global Bonds, 442 and Templeton Investments, 453
19.2 Domestic and International Stock Markets, 442 The Effect of Global Listings on Share Prices, 454
Capital Market Integration and Global Competition, 443 The Effectiveness of Homemade Int'l Diversification, 455
MARKET UPDATE Share Classes in China, 445 19.5 Asset Allocation Policy and Investment Style, 455
Institutional Differences in Stock Exchange Operations, 445 Passive Fund Management, 456
MARKET UPDATE The Growth of Online Brokers, 446 Active Fund Management, 456
International Differences in Securities Regulation, 446 19.6 Cross-Border Financial Statement Analysis, 458
19.3 International Investment Vehicles, 448 Differences in Financial Accounting Measurement, 459
Invest in Individual Foreign Securities, 448 International Differences in Financial Disclosure, 460
MARKET UPDATE The Debt of Developing Countries, 449 19.7 Summary, 461
Professionally Managed Funds of Int'l Assets, 450 Appendix 19-A Tracking an Int'l Investment Portfolio, 465
Chapter 20 International Portfolio Diversification 467
20.1 The Algebra of Portfolio Diversification, 467 Diversifying with International Equity Investments, 481
The Mean-Variance Framework, 467 MARKET UPDATE Contracts in Hi-lnflation Countries, 482
The Expected Return on a Portfolio, 468 Diversifying with International Bond Investments, 482
The Risk of a Two-Asset Portfolio, 469 Diversifying with International Stocks and Bonds, 482
Portfolios of Many Securities, 472 The Benefits of Hedging Currency Risk, 483
Mean-Variance Efficiency, 473 20.4 Home Bias, 483
20.2 Returns on Foreign Investments, 475 Explanations Based on Int'l Asset Pricing Models, 484
Expected Return on a Foreign Asset, 476 Explanations Based on Imperfect Markets, 485
Variance of Return on a Foreign Asset, 476 20.5 Summary, 488
The Shifting Sands of Portfolio Analysis, 479 Appendix 20-A Continuous Compounding Distributions, 493
Time-Varying Expected Returns and Volatilities, 479 Returns to an Emerging Stock Market, 493
Correlations between National Stock Markets, 480 Observed Returns Relative to the Normal Distribution, 494
20.3 The Benefits of International Portfolio Diversification, 481 Measures, Correlations, Betas, and Risk, 495
Chapter 21 International Asset Pricing 499
21.1 The International Capital Asset Pricing Model (IAPM), 499 21.4 Momentum Strategies, 509
The Traditional Capital Asset Pricing Model (CAPM), 499 The U.S. Evidence, 509
The International Asset Pricing Model (IAPM), 502 The International Evidence, 510
APPLICATION Job Interviews, 503 Rational Asset Pricing or Irrational Investor Behavior? 511
21.2 Factor Models and Arbitrage Pricing Theory (APT), 503 21.4 The Currency Risk Factor in Stock Returns, 511
MARKET UPDATE The Relevance of Market Indices, 505 Portfolio Theory and the Irrelevance of Hedging
21.3 Factor Models for Pricing International Assets, 505 in a Perfect World, 511
Macroeconomic Factors Associated Measuring Currency Risk Exposure, 512
with Domestic Stock Returns, 505 Is Currency Risk Priced in Financial Markets? 513
APPLICATION An Example of Arbitrage Pricing, 506 Currency Risk Exposure and MNC Hedging Activities, 514
Global versus Country versus Industry Factors, 506 21.5 Summary, 515
The International Value Premium, 507 |
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| index_date | 2024-07-02T20:55:16Z |
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| publisher | Wiley |
| record_format | marc |
| spelling | Butler, Kirt Charles 1951- Verfasser (DE-588)124171273 aut Multinational finance Kirt C. Butler 4. ed. Chichester, West Sussex Wiley 2008 XIX, 584 S. Ill., graph. Darst. 26 cm txt rdacontent n rdamedia nc rdacarrier Includes bibliographical references and indexes Multinationales Unternehmen International business enterprises Finance Foreign exchange International finance Finanzierung (DE-588)4017182-6 gnd rswk-swf Internationaler Kreditmarkt (DE-588)4120506-6 gnd rswk-swf Multinationales Unternehmen (DE-588)4075092-9 gnd rswk-swf Internationaler Kreditmarkt (DE-588)4120506-6 s Finanzierung (DE-588)4017182-6 s DE-604 Multinationales Unternehmen (DE-588)4075092-9 s b DE-604 http://www.loc.gov/catdir/enhancements/fy0827/2008378221-b.html Contributor biographical information http://www.loc.gov/catdir/enhancements/fy0827/2008378221-d.html Publisher description http://www.loc.gov/catdir/enhancements/fy0827/2008378221-t.html Table of contents only HBZ Datenaustausch application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=016509038&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis |
| spellingShingle | Butler, Kirt Charles 1951- Multinational finance Multinationales Unternehmen International business enterprises Finance Foreign exchange International finance Finanzierung (DE-588)4017182-6 gnd Internationaler Kreditmarkt (DE-588)4120506-6 gnd Multinationales Unternehmen (DE-588)4075092-9 gnd |
| subject_GND | (DE-588)4017182-6 (DE-588)4120506-6 (DE-588)4075092-9 |
| title | Multinational finance |
| title_auth | Multinational finance |
| title_exact_search | Multinational finance |
| title_exact_search_txtP | Multinational finance |
| title_full | Multinational finance Kirt C. Butler |
| title_fullStr | Multinational finance Kirt C. Butler |
| title_full_unstemmed | Multinational finance Kirt C. Butler |
| title_short | Multinational finance |
| title_sort | multinational finance |
| topic | Multinationales Unternehmen International business enterprises Finance Foreign exchange International finance Finanzierung (DE-588)4017182-6 gnd Internationaler Kreditmarkt (DE-588)4120506-6 gnd Multinationales Unternehmen (DE-588)4075092-9 gnd |
| topic_facet | Multinationales Unternehmen International business enterprises Finance Foreign exchange International finance Finanzierung Internationaler Kreditmarkt |
| url | http://www.loc.gov/catdir/enhancements/fy0827/2008378221-b.html http://www.loc.gov/catdir/enhancements/fy0827/2008378221-d.html http://www.loc.gov/catdir/enhancements/fy0827/2008378221-t.html http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=016509038&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA |
| work_keys_str_mv | AT butlerkirtcharles multinationalfinance |