How Changes in Exchange Rates and Interest Rates Affect Costs and Prices of Firms Operating in International Markets?

What Effect These Changes Might Have On A Multinational Corporation Decision To Invest Globally?

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How Changes in Exchange Rates and Interest Rates Affect Costs and Prices of Firms Operating in International Markets?
What Effect These Changes Might Have On A Multinational Corporation Decision To Invest Globally?

Abstract
Changes in interest and exchange rates directly affect profitability of companies having international business by influencing their investment decisions, production costs and prices. High interest rates are associated with higher business risk and make cost of capital more expensive, thus reducing profitability and amount of business investments in the region over a long-run period. On the other hand high interest rates are positively related to short-term exchange rates due to increased demand of the national......

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Title: Finance - International Business
Approximate Word Count: 1082
Approximate Pages: 5 (250 words per double-spaced page)

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