Consequence of foreign exchange rate risk
What are consequence of foreign exchange rate risk and how do this risk be mitigated?
Expert
The level of uncertainty Foreign exchange risk is that a company must manage for changes in foreign exchange rates which will badly affect the money the company receives for goods and services over a period.
Let’s take an example a company sells goods to a foreign company as they wanted to move the goods same day but will not receive payment for numerous days, weeks or months. During this period, the exchange rates varies. At the time of settlement when the foreign company pays to the domestic company for the goods, the rates may have moved to a level that is less than what the company expected. Resulting the company may suffer a huge loss or the profits may erode.
To manage or minimize the risk, companies enter into contracts to purchase foreign currency at a specified rate. This will permits to the companies to minimize the uncertainty of the risk so that they can accordingly price their products.
Which of the given below statement is not an illustration of the adverse selection? (i) You agree on a price for utilized car; however the dealer did not tell you it requires a new clutch. (ii) You send in money to a mail order company, however do not
When MPC and MPS are equivalent then what is the value of multiplier? Answer: MPC = MPS = 1/2 Thus K = 1/MPS = 1/1/2 = 2/1 = 2 [that is, Multiplier K = 2].
Can someone please help me in finding out the accurate answer from the following question. Unions which act primarily as tools for managers of a firm are termed as: (1) Union-busters. (2) Wildcat unions. (3) Company unions. (4) Managerial unions.
Evaluate which one is not correct? A typical production possibilities curve: A) indicates how much of two products a society can produce. B) reveals how much each additional unit of one product will cost in terms of the other product. C) specifies how much of each pro
Assume that a firm is conscious which rival firms will adjust to counter any changes in the firm’s policies and accordingly, the firm behaves strategically while this sets prices, terms to customers or output levels. That a firm is operating in a market
The market demands for automobiles are not rapidly and directly influenced by modifications in: (i) Income. (ii) Gasoline prices. (iii) Salaries paid to auto-workers. (iv) The number of legal drivers. (v) Preferences and tastes. Q : Problem on Analytic Time-Long Run Can Can someone please help me in finding out the accurate answer from the following question. The length of time needed for a firm to reach the long run is: (i) One year. (ii) Five years. (iii) Ten years. (iv) Variable and depend on the easiness of purchasing or selling
Can someone please help me in finding out the accurate answer from the following question. The length of time needed for a firm to reach the long run is: (i) One year. (ii) Five years. (iii) Ten years. (iv) Variable and depend on the easiness of purchasing or selling
Select the right ans wer of the question. The Reciprocal Trade Agreements Act: 1) exempted American exporters from the Sherman Antitrust Act. 2) provided technological assistance to developing countries. 3) brought about considerable reductions in American trade barri
When pharmaceutical manufacturers conspire to generate only Q1 penicillin, in that case the: (i) purely-competitive firms which produced penicillin would experience economic losses. (ii) resulting excessive antibiotic treatments would produce strains of dru
In the market period: (w) price is constant. (x) output is constant. (y) supply is horizontal. (z) supply is completely elastic. Please guys help to solve this problem of Economics with some explan
18,76,764
1928002 Asked
3,689
Active Tutors
1412395
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!