Q. Based on the case study, "A Tale of Two Dollars," Illustrate why errors in the currency market will be more costly to the Toronto Blue Jays baseball team than errors in the field.
Answer: The Toronto team boast 80 percent of its revenue paid in Canadian dollars and 80 percent of its expenses set in U.S. dollars. Ever since the Canadian dollar has depreciated considerably it causes big losses for the team by raising its expenses relative to its receipts. To defend itself from the vagaries of the exchange rate the team tries to predict its require for U.S. dollars further-on of time so that it can sell Canadian dollars and purchase the American currency in advance to lock in the exchange rate. Mistake in the currency market can thus be more costly to the team than on the field.