Other than inflationary expectations, name some additional factors
that influence interest rates, and explain the effects of each
How does the Fed stimulate the economy? How does the Fed affect
interest rates? Does the Fed have complete control over U.S. interest
rates; that is, can it set rates at any level it chooses? Why or
why not?
What is country risk?
What is exchange rate risk?
On what two factors does the return on a foreign investment depend?
If short-term interest rates are lower than long-term rates, why
might a borrower still choose to finance with long-term debt?
Explain the following statement: “The optimal financial policy
depends in an important way on the nature of the firm’s assets.
