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Question: 3 a.Explain comparative advantage theory in international business with MNC valuation risks and justifies...

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Question: 3 a.Explain comparative advantage theory in international business with MNC valuation risks and justifies your answer in the cross boarder investment decisions. b.Illustrate how Interest Rate Parity exists to realign of Covered Interest Arbitrage (CIA) profit? And justify your findings in the zones of CIA for potential investors. c.Assume zero transaction costs. As of today, the Japanese 3-month interest rate is 3 percent, and the US 3-month interest rate is 6 percent. The spot rate of the Japanese yen is $.093 and the 3-year forward rate o the Japanese yen is $.097. 1. Determine whether interest rate parity exists or whether the quoted forward rate is too high or too low II. Based on the information provided in (1) is covered interest arbitrage feasible for US investors, for Japanese investors, for both investors, for neither type of investors

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