Download Case Web Questions - Financial Management,4th Edition by Suk Kim

Case Problem 1: What is a National Company?
The web site of the White House www.whitehouse.gov/ gives direct access to US Federal
services, a virtual library of the White House press releases, executive orders, and many other
pieces of information. Access the above web site to answer the following questions: How and
when was the National Economic Council (NEC) created? Who is the current chairman of the
NEC? What are the principal functions of the NEC?
Case Problem 2: The Fruits of Free Trade under the World Trade Organization
The website of the World Trade Organization, www.wto.org, contains a variety of information
about WTO activities. Use this website to find what steps the WTO has taken to respond to the
protests and criticism. Do you think these steps are effective?
Case Problem 3: US-China Trade Relations
The website of the US Central Intelligence Agency www.cia.gov and the website of the US
Census Bureau www.census.gov both contain economic data and statistics on trade. Use
specific numbers from these two sites to answer the following question. “Discuss in broad terms
the major changes since WWII in the trade relations between China and the United States in
terms of actual balance of payments and foreign direct investment.”
Case Problem 4: Mexican Peso Crisis in December 1994
The home page of the International Monetary Fund (IMF) www.imf.org provides IMF-related
news, their contracts, and an update on their most recent activities. Use this web page to find out
about current IMF loans to its member countries.
Case Problem 5: The Big Mac Hamburger Standard: February 2003
A web page of OANDA.com www.oanda.com/products/bigmac/bigmac.shtml provides
exchange rate trends of various currencies. Use this web page to obtain the latest version of the
hamburger standard shown in Table 5-2.
Case Problem 6: Merck’s Use of Currency Options
The web site of the Chicago Mercantile Exchange—www.come.com—and the web site of the
Philadelphia Stock Exchange---www.phlx.com/--show a variety of information about currency
futures and options. Use these web sites to depict the prices of British pound futures and options.
Case Problem 7: Regulations of Derivative Markets
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The web site of the Securities and Exchange Commission (SEC) www.sec.gov and the web site
of the Financial Accounting Standards Board (FASB) www.fasb.org describe standard practices
for financial reporting by companies in the United States. Contact the above web sites to learn
proposed accounting standards and the status regarding reactions to these proposed standards.
Case Problem 8: GM Operations in Mexico and the Peso Crisis
The web site of the Chicago Mercantile Exchange www.cme.com provides information on
currency futures prices, including recent quotes and trends. Because a futures contract is similar
to a forward contract, it can be used to forecast the value of a currency. Use this web site to
review the recent trend of futures prices for the Mexican peso and to answer the following
questions: Why do you think that the futures prices of the peso have changed over the last few
months? Discuss how this information could be of assistance to Mr. Gary Hanson, President and
Managing Director of GM de Mexico. The web site of Olsen and Associates--www.olsen.ch-provides information on technical forecasts. Visit this web site to obtain technical information
for several currencies.
Case Problem 9: Western Mining’s Economic Exposure Management
The web sites for various multinational companies disclose exchange-rate hedging activities and
their exchange gains or losses. (Hint: see footnotes of annual reports). Based on the web site of
WMC www.wmc.com.au or the web site of IBM www.ibm.com describe the management of
foreign exchange risk for either company.
Case Problem 10: Dell Mercosur
The mission of the Financial Accounting Standard Board (FASB) is to establish and improve
standards of financial accounting and reporting for the guidance and education of the public,
including issuers, auditors, and users of financial information. Use the FASB’s home page—
www.fasb.org—to see current accounting standards and comment letters to proposed standards.
Case Problem 11: The Rise and Fall of the US Stock Market
The web site of the US State Department www.state.gov/background_notes and the web site of
the US Central Intelligence Agency www.odci.gov/cia/publications/factbook provide a variety of
economic information about most countries around the world. Use these two websites to perform
a comparative economic analysis of the United States and Japan.
Case Problem 12: Argentina’s Currency Crisis
Visit the World Bank’s website, www.worldbank.org.to find its current projects.
Case Problem 13: Arms Dealers Get Creative with Offsets
Use the web site of the American Countertrade Association (ACA) www.countertrade.org to list
the types of services provided by the ACA.
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Case Problem 14: IBM’s Strategic Alliances
The home page of IBM www.ibm.com/ covers the company's news, products, services, support,
annual financial reports, and many other areas of its business operations. Use this web page to
find recent IBM acquisitions and divestitures.
Case Problem 15: Navistar International’s Netting System
Major international banks provide a variety of working capital and cash management services for
multinational companies. Use the web site of the Bank of America--www.bankamerica.com/-and the web site of the Bank of Montreal--www.bmo.com/--to assess their multinational cash
management services.
Case Problem 16: Investing on DaimlerChrysler in the US
To list their stocks in the New York Stock Exchange, foreign companies have to comply with the
registration and disclosure requirements established by the US Securities and Exchange
Commission (SEC). Use the website of the SEC--<www.sec.gov/--to review disclosure
requirements in SEC final rules related to foreign investment and trade.
Case Problem 17: BP’s Acquisition of Amoco
Some websites, such as <www.dbc.com> and <www.quicken.com> provide many pieces of
information about publicly held companies for investors. Use several websites of your choice to
compare some key financial statistics of BP Amoco with those of its major competitors.
Case Problem 18: Multinational Capital Budgeting Practices
The web site of the Bank for International Settlements--www.bis.org/cbanks.htm--and the web
site of the US State Department--www.state.gov--give economic information on most countries
around the world. Access these web sites to obtain economic information, which can be used to
assess the feasibility of projects in a developing country.
Case Problem 19: Do Multinational Firms Have Lower Debt Ratios than Domestic Firms?
Use the web site of Bloomberg--www.bloomberg.com/markets--to compare yield rates of
government securities for several countries.
Case Problem 20: Advanced Technology’s Ethical Dilemma
The Internet Center for Corruption Research provides the transparency international perceptions
index and a comprehensive assessment of country's integrity performance. Use the website of
this organization--www.gwdg.de/~uwvw/icr.htm--to identify the five most corrupt countries and
the five least corrupt countries.
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