Instructor’s Resource Manual
Multinational Business
Finance
Fifteenth Edition
David K. Eiteman
University of California, Los Angeles
Arthur I. Stonehill
Oregon State University and University of Hawaii at Manoa
, Michael H. Moffett
Thunderbird School of Global Management
at Arizona State University
New York, NY
This work is protected by United States copyright laws and is provided solely for
the use of instructors in teaching their courses and assessing student learning.
Dissemination or sale of any part of this work (including on the World Wide Web)
will destroy the integrity of the work and is not permitted. The work and
materials from it should never be made available to students except by
instructors using the accompanying text in their classes. All recipients of this
work are expected to abide by these restrictions and to honor the intended
pedagogical purposes and the needs of other instructors who rely on these
materials.
Vice President, Business, Economics, and UK Courseware: Donna Battista
Senior Sponsoring Editor: Neeraj Bhalla
,Managing Producer, Business: Alison Kalil
Content Producer: Sugandh Juneja
Project Manager: Dinesh Deivendiran
Copyright © 2019, 2016, 2013 by Pearson Education, Inc. or its affiliates. All Rights Reserved.
Manufactured in the United States of America. This publication is protected by copyright, and permission
should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system,
or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or
otherwise. For information regarding permissions, request forms, and the appropriate contacts within the
Pearson Education Global Rights and Permissions department, please visit
www.pearsoned.com/permissions/.
Unless otherwise indicated herein, any third-party trademarks, logos, or icons that may appear in this
work are the property of their respective owners, and any references to third-party trademarks, logos,
icons, or other trade dress are for demonstrative or descriptive purposes only. Such references are not
intended to imply any sponsorship, endorsement, authorization, or promotion of Pearson’s products by the
owners of such marks, or any relationship between the owner and Pearson Education, Inc., or its affiliates,
authors, licensees, or distributors.
ISBN-13: 978-0-13-479657-4
ISBN-10: 0-13-479657-8
, Contents
Chapter 1 Multinational Financial Management: Opportunities and Challenges ............................ 1
Chapter 2 The International Monetary System ................................................................................ 8
Chapter 3 The Balance of Payments .............................................................................................. 13
Chapter 4 Financial Goals and Corporate Governance .................................................................. 22
Chapter 5 The Foreign Exchange Market ...................................................................................... 28
Chapter 6 International Parity Conditions ...................................................................................... 34
Chapter 7 Foreign Currency Derivatives: Futures and Options ..................................................... 41
Chapter 8 Interest Rate Risk and Swaps ........................................................................................ 46
Chapter 9 Foreign Exchange Rate Determination and Intervention .............................................. 52
Chapter 10 Transaction Exposure .................................................................................................. 60
Chapter 11 Translation Exposure ................................................................................................... 66
Chapter 12 Operating Exposure ..................................................................................................... 71
Chapter 13 Global Cost and Availability of Capital ....................................................................... 76
Chapter 14 Funding the Multinational Firm .................................................................................. 81
Chapter 15 Multinational Tax Management ................................................................................... 89
Chapter 16 International Trade Finance ......................................................................................... 97
Chapter 17 Foreign Direct Investment and Political Risk............................................................ 101
Chapter 18 Multinational Capital Budgeting and Cross-Border Acquisitions ............................. 115
Multinational Business
Finance
Fifteenth Edition
David K. Eiteman
University of California, Los Angeles
Arthur I. Stonehill
Oregon State University and University of Hawaii at Manoa
, Michael H. Moffett
Thunderbird School of Global Management
at Arizona State University
New York, NY
This work is protected by United States copyright laws and is provided solely for
the use of instructors in teaching their courses and assessing student learning.
Dissemination or sale of any part of this work (including on the World Wide Web)
will destroy the integrity of the work and is not permitted. The work and
materials from it should never be made available to students except by
instructors using the accompanying text in their classes. All recipients of this
work are expected to abide by these restrictions and to honor the intended
pedagogical purposes and the needs of other instructors who rely on these
materials.
Vice President, Business, Economics, and UK Courseware: Donna Battista
Senior Sponsoring Editor: Neeraj Bhalla
,Managing Producer, Business: Alison Kalil
Content Producer: Sugandh Juneja
Project Manager: Dinesh Deivendiran
Copyright © 2019, 2016, 2013 by Pearson Education, Inc. or its affiliates. All Rights Reserved.
Manufactured in the United States of America. This publication is protected by copyright, and permission
should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system,
or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or
otherwise. For information regarding permissions, request forms, and the appropriate contacts within the
Pearson Education Global Rights and Permissions department, please visit
www.pearsoned.com/permissions/.
Unless otherwise indicated herein, any third-party trademarks, logos, or icons that may appear in this
work are the property of their respective owners, and any references to third-party trademarks, logos,
icons, or other trade dress are for demonstrative or descriptive purposes only. Such references are not
intended to imply any sponsorship, endorsement, authorization, or promotion of Pearson’s products by the
owners of such marks, or any relationship between the owner and Pearson Education, Inc., or its affiliates,
authors, licensees, or distributors.
ISBN-13: 978-0-13-479657-4
ISBN-10: 0-13-479657-8
, Contents
Chapter 1 Multinational Financial Management: Opportunities and Challenges ............................ 1
Chapter 2 The International Monetary System ................................................................................ 8
Chapter 3 The Balance of Payments .............................................................................................. 13
Chapter 4 Financial Goals and Corporate Governance .................................................................. 22
Chapter 5 The Foreign Exchange Market ...................................................................................... 28
Chapter 6 International Parity Conditions ...................................................................................... 34
Chapter 7 Foreign Currency Derivatives: Futures and Options ..................................................... 41
Chapter 8 Interest Rate Risk and Swaps ........................................................................................ 46
Chapter 9 Foreign Exchange Rate Determination and Intervention .............................................. 52
Chapter 10 Transaction Exposure .................................................................................................. 60
Chapter 11 Translation Exposure ................................................................................................... 66
Chapter 12 Operating Exposure ..................................................................................................... 71
Chapter 13 Global Cost and Availability of Capital ....................................................................... 76
Chapter 14 Funding the Multinational Firm .................................................................................. 81
Chapter 15 Multinational Tax Management ................................................................................... 89
Chapter 16 International Trade Finance ......................................................................................... 97
Chapter 17 Foreign Direct Investment and Political Risk............................................................ 101
Chapter 18 Multinational Capital Budgeting and Cross-Border Acquisitions ............................. 115
