链岗纤将贸号上号 国际财务管理 微型案例 CORPORATE DILEMMA 1.Monitoring the Peso's Value Viacom's Blockbuster Entertainment Group has been very successful in its growth of video stores throughout the U.S.in recent years,it has developed a network of stores in various foreign countries.One of its more recent targets is Mexico,where it has plants to establish a major presence.Mexico tends to have much higher inflation than the U.S.and also much higher interest rates than the U.S.The inflation and interest rates are much more volatile in Mexico than in industrialized countries.The value of the Mexican peso is typically more volatile than the currencies of industrialized countries from a U.S.perspective;it has typically depreciated from one year to the next but the degree of depreciation has varied substantially. The bid/ask spread tends to be wider for the peso than currencies in industrialized countries. Since Blockbuster Entertainment Group is planning substantial business operations in Mexico, it needs to recognize how various factors affected the peso's value in the past and how they are likely to affect the peso's value in the future. 1.Identify the most obvious economic reason for the persistent depreciation in the value of the peso. 2.High interest rates are commonly expected to strengthen a country's currency because they can encourage foreign investment in securities in that country,which results in the exchange of other currencies for that currency.Yet,the peso's value has declined against the dollar over most years event though the Mexican interest rates are typically much higher than the U.S.interest rates.Thus,it appears that the high Mexican interest rates do not attract substantial U.S.investment in Mexico's securities.Why do you think U.S. investors do not try to capitalize on the high interest rates in Mexico? 3.Why do you think the bid/ask spread is higher for pesos than for currencies of industrialized countries?How does this affect a U.S.from such as Blockbuster that does substantial business in Mexico? 2.Wal-mart's Use of International Financial Markets Wal-Mart (based in Bentonville,Arkansas)is known for its successful retail outlets that are now scattered throughout the United States.Recently it established two retail outlets in the city of shanzen,China,which has a population of 3.7 million.These outlets are massive and contain products purchased locally as well as imports.Wal-mart priced its products 3%to 5% lower than products sold at other outlets in Shanzen.As Wal-Mart generates earnings beyond what it needs in Shanzen,it may remit those earnings back to the United States.Wal-Mart is likely to build additional outlets in Shanzen or in other cities in the future. 1.Explain how the Wal-Mat outlets in China would use the spot market in foreign exchange. 2.Explain how Wal-Mart's parent may utilize the Eurocurrency market when it is establishing other Wal-Mart stores in Asia. 3.Explain how Wal-Mart could use the Eurobond market to finance the establishment of -2-国际财务管理 微型案例 - 2 - CORPORATE DILEMMA 1. Monitoring the Peso’s Value Viacom’s Blockbuster Entertainment Group has been very successful in its growth of video stores throughout the U.S. in recent years, it has developed a network of stores in various foreign countries. One of its more recent targets is Mexico, where it has plants to establish a major presence. Mexico tends to have much higher inflation than the U.S. and also much higher interest rates than the U.S. The inflation and interest rates are much more volatile in Mexico than in industrialized countries. The value of the Mexican peso is typically more volatile than the currencies of industrialized countries from a U.S. perspective; it has typically depreciated from one year to the next but the degree of depreciation has varied substantially. The bid/ask spread tends to be wider for the peso than currencies in industrialized countries. Since Blockbuster Entertainment Group is planning substantial business operations in Mexico, it needs to recognize how various factors affected the peso’s value in the past and how they are likely to affect the peso’s value in the future. 1. Identify the most obvious economic reason for the persistent depreciation in the value of the peso. 2. High interest rates are commonly expected to strengthen a country’s currency because they can encourage foreign investment in securities in that country, which results in the exchange of other currencies for that currency. Yet, the peso’s value has declined against the dollar over most years event though the Mexican interest rates are typically much higher than the U.S. interest rates. Thus, it appears that the high Mexican interest rates do not attract substantial U.S. investment in Mexico’s securities. Why do you think U.S. investors do not try to capitalize on the high interest rates in Mexico? 3. Why do you think the bid/ask spread is higher for pesos than for currencies of industrialized countries? How does this affect a U.S. from such as Blockbuster that does substantial business in Mexico? 2. Wal-mart’s Use of International Financial Markets Wal-Mart (based in Bentonville, Arkansas) is known for its successful retail outlets that are now scattered throughout the United States. Recently it established two retail outlets in the city of shanzen, China, which has a population of 3.7 million. These outlets are massive and contain products purchased locally as well as imports. Wal-mart priced its products 3% to 5% lower than products sold at other outlets in Shanzen. As Wal-Mart generates earnings beyond what it needs in Shanzen, it may remit those earnings back to the United States. Wal-Mart is likely to build additional outlets in Shanzen or in other cities in the future. 1. Explain how the Wal-Mat outlets in China would use the spot market in foreign exchange. 2. Explain how Wal-Mart’s parent may utilize the Eurocurrency market when it is establishing other Wal-Mart stores in Asia. 3. Explain how Wal-Mart could use the Eurobond market to finance the establishment of