Define each of the following terms:
a. Multinational corporation
b. Vertically integrated investment
c. International monetary system
d. Exchange rate
e. Freely-floating regime; managed-float regime
f. Currency board arrangement
g. Fixed peg arrangement
h. Cross rate
i. American terms; European terms
j. Direct quotation; indirect quotation
k. Spot rate; forward exchange rate
l. Discount on forward rate; premium on forward rate
m. Interest rate parity; purchasing power parity
n. Eurocredits; eurodollar
o. Eurobond; foreign bond
p. American Depository Receipts (ADRs)
q. Repatriation of earnings; exchange rate risk; political risk; business climate
ST-2 Cross rates Suppose the exchange rate between U.S. dollars and EMU euros is €1.1215
$1.00, and the exchange rate between the U.S. dollar and the Canadian dollar is $1.00
C$1.5291. What is the cross rate of euros to Canadian dollars?
