Essays on International business

What role does the WTO play in international business? In this increasingly globalized scenario, companies need to be globally competitive in order to survive. Knowledge and understanding of different countries’ economies and their market is a must for establishing oneself as a global player. Now the business has gone beyond the boundaries of a nation…

The transaction exposure component of the foreign exchange rates is also referred to as a short-term economic exposure. This relates to the risk attached to specific contracts in which the company has already entered that result in foreign exchange exposures. A company may have a transaction exposure if it is either on the buy side…

The first thing to say about the North American Free Trade Agreement is that the protectionist attacks on it by Ross Perot, Dick Gephardt, Ralph Nader, Jesse Jackson, and others are nonsensical. Jimmy Carter was not exaggerating when he characterized Perot as a demagogue “with unlimited financial resources, who is extremely careless with the truth,…

Interest rate parity is a no-arbitrage condition representing an equilibrium state under which investors will be indifferent to interest rates available on bank deposits in two countries.  The fact that this condition does not always hold allows for potential opportunities to earn riskless profits from covered interest arbitrage. Two assumptions central to interest rate parity…