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| Preface | |
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| Acknowledgments | |
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| The International Financial Environment | |
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| An Introduction to Multinational Finance | |
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| Executive Summary | |
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| The Goals of the Multinational Corporation | |
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| The Challenges of Multinational Operations | |
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| The Opportunities of Multinational Operations | |
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| Financial Management of the Multinational Corporation | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| World Trade and the International Monetary System | |
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| Executive Summary | |
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| Integration of the World's Markets | |
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| Balance-of-Payments Statistics | |
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| Exchange Rate Systems | |
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| A Brief History of the International Monetary System | |
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| The Global Financial Crisis of 2008 | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Foreign Exchange and Eurocurrency Markets | |
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| Executive Summary | |
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| Characteristics of Financial Markets | |
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| The Eurocurrency Market | |
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| The Foreign Exchange Market | |
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| Foreign Exchange Rates and Quotations | |
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| The Empirical Behavior of Exchange Rates | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| The International Parity Conditions and Their Consequences | |
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| Executive Summary | |
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| The Law of One Price | |
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| Exchange Rate Equilibrium | |
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| Interest Rate Parity and Covered Interest Arbitrage | |
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| Less Reliable International Parity Conditions | |
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| The Real Exchange Rate | |
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| Exchange Rate Forecasting | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Appendix 4A: Continuous Compounding | |
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| Problems | |
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| Derivative Securities for Financial Risk Management | |
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| Currency Futures and Futures Markets | |
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| Executive Summary | |
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| Financial Futures Exchanges | |
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| The Operation of Futures Markets | |
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| Futures Contracts | |
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| Forward versus Futures Market Hedges | |
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| Futures Hedges Using Cross-Exchange Rates | |
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| Hedging with Currency Futures | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Currency Options and Options Markets | |
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| Executive Summary | |
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| What Is an Option? | |
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| Option Payoff Profiles | |
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| Currency Option Values Prior to Expiration | |
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| Hedging with Currency Options | |
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| Exchange Rate Volatility Revisited (Advanced) | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Appendix 6A: Currency Option Valuation | |
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| Key Terms | |
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| Problems | |
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| Suggested Readings | |
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| Currency Swaps and Swaps Markets | |
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| Executive Summary | |
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| The Growth of the Swaps Market | |
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| Swaps as Portfolios of Forward Contracts | |
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| Currency Swaps | |
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| Interest Rate Swaps | |
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| Other Types of Swaps | |
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| Hedging the Swap Bank's Exposure to Financial Price Risk | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Managing the Risks of Multinational Operations | |
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| Multinational Treasury Management | |
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| Executive Summary | |
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| Determining Financial Goals and Strategies | |
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| Managing the Corporation's International Trade | |
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| Financing the Corporation's International Trade | |
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| Managing the Multinational Corporation's Cash Flows | |
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| Currency Risk Management in the Multinational Corporation | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Appendix 8A: The Rationale for Hedging Currency Risk | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Managing Transaction Exposure to Currency Risk | |
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| Executive Summary | |
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| An Example of Transaction Exposure to Currency Risk | |
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| Managing Transaction Exposures Internally | |
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| Managing Transaction Exposure in Financial Markets | |
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| Treasury Management in Practice | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Managing Operating Exposure to Currency Risk | |
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| Executive Summary | |
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| Operating Exposures to Currency Risk | |
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| The Exposure of Shareholders' Equity | |
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| Managing Operating Exposure in the Financial Markets | |
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| Managing Operating Exposure through Operations | |
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| Pricing Strategy and the Firm's Competitive Environment | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Managing Translation Exposure and Accounting for Financial Transactions | |
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| Executive Summary | |
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| The Current Rate Method of Financial Accounting Standard No. 52 | |
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| Corporate Hedging of Translation Exposure | |
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| Accounting for Financial Market Transactions | |
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| Accounting, Disclosure, and Corporate Hedging Activities | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Valuation and the Structure of Multinational Operations | |
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| Foreign Market Entry and Country Risk Management | |
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| Executive Summary | |
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| Strategic Entry into International Markets | |
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| Country Risk Assessment | |
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| Strategies for Managing Country Risk | |
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| Protecting the Multinational's Competitive Advantages | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Multinational Capital Budgeting | |
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| Executive Summary | |
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| The Algebra of Multinational Capital Budgeting | |
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| An Example: Wendy's Restaurant in Neverland | |
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| International Parity Disequilibria | |
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| Special Circumstances in Cross-Border Investments | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Multinational Capital Structure and Cost of Capital | |
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| Executive Summary | |
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| Capital Structure and the Cost of Capital | |
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| Project Valuation and the Cost of Capital | |
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| The Cost of Capital on Multinational Operations | |
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| Sources of Funds for Multinational Operations | |
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| The International Evidence on Capital Structure | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Taxes and Multinational Corporate Strategy | |
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| Executive Summary | |
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| The Objectives of National Tax Policy | |
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| Types of Taxation | |
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| U.S. Taxation of Foreign-Source Income | |
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| Taxes and Organizational Form | |
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| Transfer Pricing and Tax Planning | |
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| Taxes and the Location of Foreign Assets and Liabilities | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Real Options and Cross-Border Investment Strategy | |
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| Executive Summary | |
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| Real Options and the Theory and Practice of Investment | |
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| Market Entry as a Simple Real Option | |
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| Uncertainty and the Value of the Option to Invest | |
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| Market Entry as a Compound Real Option | |
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| The Real Option Approach as a Complement to Net Present Value | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| Corporate Governance and the International Market for Corporate Control | |
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| Executive Summary | |
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| Corporate Governance | |
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| The International Market for Corporate Control | |
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| The International Evidence on Mergers and Acquisitions | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| International Portfolio Investment and Asset Pricing | |
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| International Capital Markets | |
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| Executive Summary | |
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| Domestic and International Bond Markets | |
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| Domestic and International Stock Markets | |
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| International Investment Vehicles | |
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| Share Prices in International Markets | |
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| Asset Allocation Policy and Investment Style | |
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| Cross-Border Financial Statement Analysis | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| International Portfolio Diversification | |
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| Executive Summary | |
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| The Algebra of Portfolio Diversification | |
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| Returns on Foreign Investments | |
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| The Benefits of International Portfolio Diversification | |
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| Home Bias | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |
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| Suggested Readings | |
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| International Asset Pricing | |
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| Executive Summary | |
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| The International Capital Asset Pricing Model | |
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| Factor Models and Arbitrage Pricing Theory | |
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| Factor Models for International Assets | |
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| Momentum Strategies | |
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| Contemporary Asset Pricing Models | |
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| Summary | |
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| Key Terms | |
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| Conceptual Questions | |
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| Problems | |