Question 1. With almost all clothing, electronics, cast metal items and computer problem calls now made off shore, do you think that one day, every employee in the same job, any where in the world will be making the same minimum wage, adjusted for the exchange rate? Why?
Question 2. One of this week's learning objectives involves the mitigation of foreign exchange rate risk. Because our world operates, for the most part, on floating interest rates, businesses are constantly at risk of losing huge amounts of money due to unfavorable movements in exchange rates. Obviously, an organization does not want to make a nice profit on a sale to an international customer only to see that profit eaten away by exchange rate movements. Because this common problem faces every organization in the world that has a customer or supplier outside their own country, various tools and markets have been created to help control the risks.
If you were in charge of exchange rates at your new job, what would you do to mitigate the risk?