• Instructions:
o You need to answer the following questions:
1. What is the function of the international money market? Briefly describe the reasons for the development and growth of the European money market. Explain how the international money, credit, and bond markets differ from one another. (300 words)
2. Walmart established two retail outlets in the city of Shanzen, China, which has a population of 3.7 million. These outlets are massive and contain imports in addition to products purchased locally. As Walmart generates earnings beyond what it needs in Shanzen, it may remit those earnings back to the United States. Walmart is likely to build additional outlets in Shanzen or in other Chinese cities in the future. (600 words)
a) Explain how the Walmart outlets in China would use the spot market in foreign exchange.
b) Explain how Walmart might utilize the international money market when it is establishing other Walmart stores in Asia.
c) Explain how Walmart could use the international bond market to finance the establishment of new outlets in foreign markets.
3. Bloomington Co. is a large U.S.-based MNC with large subsidiaries in Germany. It has issued stock in Germany in order to establish its business. It could have issued stock in the U.S. and then used the proceeds in order to support the growth in Europe. What is a possible advantage of issuing the stock in Germany to finance German operations? Also, why might the German investors prefer to purchase the stock that was issued in Germany rather than purchase the stock of Bloomington on a U.S. stock exchange? (300 words)
• Extra guidelines
Those questions above should be answered directly (and not In the form of an essay)
You need to follow the number of words required for each question (written in brackets beside each question)
The assignment should not be in the form of an essay
• Format
Font style: Times new roman
Font size: 12
Spacing: 2
