Running head: FINANCING INTERNATIONAL TRADE 1
"Financing International Trade," Chapter 20, "Short-Term Financing," and Chapter 21,
"International Cash Management."
Strayer University
, FINANCING INTERNATIONAL TRADE2
This week′s homework relates to Chapter 19, ″Financing International Trade, ″ Chapter 20,
″Short-Term Financing, ″ and Chapter 21, ″International Cash Management. ″ Instructions
Please respond to the following: 1. What organization could Blades contact in order to ensure
its sales to the Thai retailers? What type of insurance do these organizations provide? 2.
Break-even Financing Providence Co. needs dollars. Assume that the local one-year loan rate
is 15 percent, while a one-year loan rate on euros is 7 percent. By how much must the euro
appreciate to cause the loan in euros to be more costly than a U.S.-dollar loan? 3. Break-even
Financing Lakeland, Inc., is a U.S.-based MNC with a subsidiary in Mexico. Its Mexican
subsidiary needs a one-year loan of 10 million pesos for operating expenses. Since the
Mexican interest rate is 70 percent, Lakeland is considering borrowing dollars, which it
would convert to pesos to cover the operating expenses. By how much would the dollar have
to appreciate against the peso to cause such a strategy to backfire? (The one-year U.S. interest
rate is 9 percent.) 4. Investing Strategy Tallahassee Co. has $2 million in excess cash that it
has invested in Mexico at an annual interest rate of 60 percent. The U.S. interest rate is 9
percent. By how much would the Mexican peso have to depreciate to cause such a strategy to
backfire?
1. What organization could Blades contact in order to insure its sale its sales to the
Thai retailers? What type of insurance do these organizations provide?
Export-Import Bank of the United States facilitates and finances the export of the U.S.
goods and strengthens American firms' competitiveness participating in foreign trade.
Therefore, the only organization that Blades should contact is the Export-Import Bank
of the United States (Eximbank). This organization offers insurance covers against
foreignbuyers’ nonpayment risks. Regarding this insurance protection, Eximbank will
"Financing International Trade," Chapter 20, "Short-Term Financing," and Chapter 21,
"International Cash Management."
Strayer University
, FINANCING INTERNATIONAL TRADE2
This week′s homework relates to Chapter 19, ″Financing International Trade, ″ Chapter 20,
″Short-Term Financing, ″ and Chapter 21, ″International Cash Management. ″ Instructions
Please respond to the following: 1. What organization could Blades contact in order to ensure
its sales to the Thai retailers? What type of insurance do these organizations provide? 2.
Break-even Financing Providence Co. needs dollars. Assume that the local one-year loan rate
is 15 percent, while a one-year loan rate on euros is 7 percent. By how much must the euro
appreciate to cause the loan in euros to be more costly than a U.S.-dollar loan? 3. Break-even
Financing Lakeland, Inc., is a U.S.-based MNC with a subsidiary in Mexico. Its Mexican
subsidiary needs a one-year loan of 10 million pesos for operating expenses. Since the
Mexican interest rate is 70 percent, Lakeland is considering borrowing dollars, which it
would convert to pesos to cover the operating expenses. By how much would the dollar have
to appreciate against the peso to cause such a strategy to backfire? (The one-year U.S. interest
rate is 9 percent.) 4. Investing Strategy Tallahassee Co. has $2 million in excess cash that it
has invested in Mexico at an annual interest rate of 60 percent. The U.S. interest rate is 9
percent. By how much would the Mexican peso have to depreciate to cause such a strategy to
backfire?
1. What organization could Blades contact in order to insure its sale its sales to the
Thai retailers? What type of insurance do these organizations provide?
Export-Import Bank of the United States facilitates and finances the export of the U.S.
goods and strengthens American firms' competitiveness participating in foreign trade.
Therefore, the only organization that Blades should contact is the Export-Import Bank
of the United States (Eximbank). This organization offers insurance covers against
foreignbuyers’ nonpayment risks. Regarding this insurance protection, Eximbank will
