Part IIIThe two chapters in this section provide a stark contrast. Mauer's research uses
an empirical approach to explore the effects of foreign exchange rate volatility
on the value of multinational firms. De Los Rios and Flowers describe the way
that U.S. federal law, Florida state law and treaty agreements attempt to protect
the U.S. banking system from money-laundering connections with the horrific
world of drug smuggling. Both chapters take the reader down from the more
abstract world of global economies and markets to the more practical and
detailed world of multinational financial operations.
RISKY INTERNATIONAL CASH FLOWSDo foreign exchange fluctuations make the cash flows of multinational
corporations more risky than those of domestic enterprises? How does foreign
exchange volatility affect multinational firm value? Mauer seeks to answer these
questions by modeling the relationship between foreign exchange rate changes
and a measure of firm value. By measuring the impact of foreign exchange rate
changes on operating income before depreciation and exchange rate losses, this
state-of-the-art research avoids methodological problems that have hampered
other studies in this area. The study concludes by describing a wide range of
foreign exchange structures that suggest that both transactions and operating
exposures are important.De Los Rios and Flowers use the situations of Citibank, the National
Democratic and two San Francisco interior designers to illustrate how easy it is
for North American financial institutions to be compromised by money from the
drug trade--funds flows that are increasing dramatically between the United
States and Latin America.You will learn about:
|why drug dealers like stock brokers|
|the implications of reputational risk|
Questia, a part of Gale, Cengage Learning. www.questia.com
Book title: Interlocking Global Business Systems:The Restructuring of Industries, Economies and Capital Markets.
Contributors: Edward B. Flowers - Editor, Thomas P. Chen - Editor, Jonchi P. Shyu - Editor.
Publisher: Quorum Books.
Place of publication: Westport, CT.
Publication year: 1999.
Page number: 159.
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