1. Describe the concept of market efficiency. In what sense is this concept an important part of the shareholder wealth maximization objective?
2. If a capital market is not efficient, what is the impact on a firm seeking to raise capital in that market? Why?
3. Define the following terms:
a. Multinational corporation
b. Spot exchange rate
c. Forward exchange rate
d. Direct quote versus indirect quote
e. Option
f. LIBOR
g. Euro