Finance HW

Each student should answer the questions below and turn in a hard copy of the answers when it is due.

Questions

1. What was the problem that Disney faced?

2. What were the various choices that Disney had to deal with this problem?

3. Evaluate each of the choices above. Which is the best choice? Why is it best?

4. Where does Disney have a comparative advantage?

5. Where does the French Utility have a comparative advantage?

6. In what currency does Disney want to borrow? Why?

7. In what currency does the French Utility want to borrow?

8. If Disney and the French Utility execute a swap, describe how the swap would work and calculate what the potential gain is from the swap.