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Optimal Foreign Borrowing Strategies with Operations in Forward Exchange Markets

Published online by Cambridge University Press:  06 April 2009

William R. Folks Jr
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Extract

When a unit of a multinational corporation requires short-term funding, it normally has the opportunity to obtain funds from a number of different sources, both internal and external to the country where these funds will be deployed. The possibility exists for borrowing in a currency other than the local currency of the borrowing unit. The purpose of this paper is to find the optimal currency source or sources for such a loan, when the borrowing unit can enter the forward exchange market for a term equivalent to the time to maturity of the loan.

Information

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 13 , Issue 2 , June 1978 , pp. 245 - 254
Copyright
Copyright © School of Business Administration, University of Washington 1978

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References

REFERENCES

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