Again, very straightforward questions....  I'm not looking for
explanations, just right answers....

4. International Capital Budgeting. Which of the following items do
you need if you do all your capital budgeting calculations in your own
currency?
Forecasts of future exchange rates
Forecasts of the foreign inflation rate
Forecasts of the domestic inflation rate
Foreign interest rates
Domestic interest rates



5. Foreign Currency Management. Ms. Rosetta Stone, the treasurer of
International Reprints, Inc, has noticed that the interest rate in
Japan is below the rates in most other countries. She is therefore
suggesting that the company should make an issue of Japanese yen
bonds. What considerations ought she first take into account?


6. Hedging Exchange Rate Risk. An importer in the United States is due
to take delivery of silk scarves from Europe in 6 months. The price is
fixed in euros. Which of the following transactions could eliminate
the importer?s exchange risk?
a. Buy euros forward.
b. Sell euros forward.
c. Borrow euros, buy dollars at the spot exchange rate.
d. Sell euros at the spot exchange rate, lend dollars.