Multinational Finance -- Contents -- Preface -- Acknowledgments -- Part 1 The International Financial Environment -- Chapter 1 An Introduction to Multinational Finance -- 1.1 The Goals of the Multinational Corporation -- 1.2 The Challenges of Multinational Operations -- 1.3 The Opportunities of Multinational Operations -- 1.4 Financial Management of the Multinational Corporation -- 1.5 Summary -- Key Terms -- Conceptual Questions -- Chapter 2 World Trade and the International Monetary System -- 2.1 Integration of the World's Markets -- 2.2 Balance-of-Payments Statistics -- 2.3 Exchange Rate Systems -- 2.4 A Brief History of the International Monetary System -- 2.5 The Global Financial Crisis of 2008 -- 2.6 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Chapter 3 Foreign Exchange and Eurocurrency Markets -- 3.1 Characteristics of Financial Markets -- 3.2 The Eurocurrency Market -- 3.3 The Foreign Exchange Market -- 3.4 Foreign Exchange Rates and Quotations -- 3.5 The Empirical Behavior of Exchange Rates -- 3.6 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Chapter 4 The International Parity Conditions and Their Consequences -- 4.1 The Law of One Price -- 4.2 Exchange Rate Equilibrium -- 4.3 Interest Rate Parity and Covered Interest Arbitrage -- 4.4 Less Reliable International Parity Conditions -- 4.5 The Real Exchange Rate -- 4.6 Exchange Rate Forecasting -- 4.7 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Appendix 4A: Continuous Compounding -- Problems -- Part 2 Derivative Securities for Financial Risk Management -- Chapter 5 Currency Futures and Futures Markets -- 5.1 Financial Futures Exchanges -- 5.2 The Operation of Futures Markets -- 5.3 Futures Contracts.

5.4 Forward versus Futures Market Hedges -- 5.5 Futures Hedges Using Cross-Exchange Rates -- 5.6 Hedging with Currency Futures -- 5.7 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Chapter 6 Currency Options and Options Markets -- 6.1 What Is an Option? -- 6.2 Option Payoff Profiles -- 6.3 Currency Option Values Prior to Expiration -- 6.4 Hedging with Currency Options -- 6.5 Exchange Rate Volatility Revisited (Advanced) -- 6.6 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Appendix 6A: Currency Option Valuation -- Key Terms -- Problems -- Suggested Readings -- Chapter 7 Currency Swaps and Swaps Markets -- 7.1 The Growth of the Swaps Market -- 7.2 Swaps as Portfolios of Forward Contracts -- 7.3 Currency Swaps -- 7.4 Interest Rate Swaps -- 7.5 Other Types of Swaps -- 7.6 Hedging the Swap Bank's Exposure to Financial Price Risk -- 7.7 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Part 3 Managing the Risks of Multinational Operations -- Chapter 8 Multinational Treasury Management -- 8.1 Determining Financial Goals and Strategies -- 8.2 Managing the Corporation's International Trade -- 8.3 Financing the Corporation's International Trade -- 8.4 Managing the Multinational Corporation's Cash Flows -- 8.5 Currency Risk Management in the Multinational Corporation -- 8.6 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Appendix 8A: The Rationale for Hedging Currency Risk -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Chapter 9 Managing Transaction Exposure to Currency Risk -- 9.1 An Example of Transaction Exposure to Currency Risk -- 9.2 Managing Transaction Exposures Internally -- 9.3 Managing Transaction Exposure in Financial Markets.

9.4 Treasury Management in Practice -- 9.5 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Chapter 10 Managing Operating Exposure to Currency Risk -- Executive Summary -- 10.1 Operating Exposures to Currency Risk -- 10.2 The Exposure of Shareholders' Equity -- 10.3 Managing Operating Exposure in the Financial Markets -- 10.4 Managing Operating Exposure through Operations -- 10.5 Pricing Strategy and the Firm's Competitive Environment -- 10.6 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Chapter 11 Managing Translation Exposure and Accounting for Financial Transactions -- Executive Summary -- 11.1 The Current Rate Method of Financial Accounting Standard No. 52 -- 11.2 Corporate Hedging of Translation Exposure -- 11.3 Accounting for Financial Market Transactions -- 11.4 Accounting, Disclosure, and Corporate Hedging Activities -- 11.5 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Part 4 Valuation and the Structure of Multinational Operations -- Chapter 12 Foreign Market Entry and Country Risk Management -- 12.1 Strategic Entry into International Markets -- 12.2 Country Risk Assessment -- 12.3 Strategies for Managing Country Risk -- 12.4 Protecting the Multinational's Competitive Advantages -- 12.5 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Chapter 13 Multinational Capital Budgeting -- 13.1 The Algebra of Multinational Capital Budgeting -- 13.2 An Example: Wendy's Restaurant in Neverland -- 13.3 International Parity Disequilibria -- 13.4 Special Circumstances in Cross-Border Investments -- 13.5 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Chapter 14 Multinational Capital Structure and Cost of Capital.

14.1 Capital Structure and the Cost of Capital -- 14.2 Project Valuation and the Cost of Capital -- 14.3 The Cost of Capital on Multinational Operations -- 14.4 Sources of Funds for Multinational Operations -- 14.5 The International Evidence on Capital Structure -- 14.6 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Chapter 15 Taxes and Multinational Corporate Strategy -- 15.1 The Objectives of National Tax Policy -- 15.2 Types of Taxation -- 15.3 U.S. Taxation of Foreign-Source Income -- 15.4 Taxes and Organizational Form -- 15.5 Transfer Pricing and Tax Planning -- 15.6 Taxes and the Location of Foreign Assets and Liabilities -- 15.7 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Chapter 16 Real Options and Cross-Border Investment Strategy -- 16.1 Real Options and the Theory and Practice of Investment -- 16.2 Market Entry as a Simple Real Option -- 16.3 Uncertainty and the Value of the Option to Invest -- 16.4 Market Entry as a Compound Real Option -- 16.5 The Real Option Approach as a Complement to Net Present Value -- 16.6 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Chapter 17 Corporate Governance and the International Market for Corporate Control -- Executive Summary -- 17.1 Corporate Governance -- 17.2 The International Market for Corporate Control -- 17.3 The International Evidence on Mergers and Acquisitions -- 17.4 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Part 5 International Portfolio Investment and Asset Pricing -- Chapter 18 International Capital Markets -- 18.1 Domestic and International Bond Markets -- 18.2 Domestic and International Stock Markets -- 18.3 International Investment Vehicles -- 18.4 Share Prices in International Markets.

18.5 Asset Allocation Policy and Investment Style -- 18.6 Cross-Border Financial Statement Analysis -- 18.7 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Chapter 19 International Portfolio Diversification -- 19.1 The Algebra of Portfolio Diversification -- 19.2 Returns on Foreign Investments -- 19.3 The Benefits of International Portfolio Diversification -- 19.4 Home Bias -- 19.5 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Chapter 20 International Asset Pricing -- 20.1 The International Capital Asset Pricing Model -- 20.2 Factor Models and Arbitrage Pricing Theory -- 20.3 Factor Models for International Assets -- 20.4 Momentum Strategies -- 20.5 Contemporary Asset Pricing Models -- 20.6 Summary -- Key Terms -- Conceptual Questions -- Problems -- Suggested Readings -- Notes -- Solutions to Even-Numbered Problems -- Symbols and Acronyms -- Useful Rules and Formulas -- Useful Websites -- Glossary -- Index.